Rising shale oil production in US serious threat to Nigeria’s crude sales, budget
A strong threat to Nigeria oil income is emerging with the growing production of Shale oil by the United States and this formed the basis for the observed drop in the United States’ monthly crude oil import from Nigeria to below 3.0 million barrels for the first time in more than two years. The drop in purchase of Nigerian oil by US came down so low to 62% within the period under review.
Industry analysts say drops in purchases from major buyers pose serious threats to chances of meeting up with the 2018 budgetary allocations. It would be recalled that several contracts and even projects that were clearly approved and contained in the yearly budget had remained untouched due to paucity of fund by the federal government.
Besides, several key projects that were either funded or delivered received their funding from partly federation account or loans from China.
Data from the US Energy Information Administration (EIA) weekend revealed that the US bought 2.89 million barrels of Nigerian crude in May, the lowest since February 2016.
It was also gathered that the US oil production, which has been booming at record levels in recent months, hit 10.9 million barrels per day in June.
This was happening at a time over 30 barges of Nigerian crude oil had been floating on high seas looking for buyers.
Otherwise, US cut its oil imports from Nigeria by 62.08 per cent to 3.92 million barrels in March, from 10.03 million barrels and 10.34 million barrels in January and February, respectively. It bought 7.75 million barrels in April.
It showed further that US purchased a total of 24.28 million barrels of Nigerian crude in the first three months of this year, down from 25.97 million barrels in the same period last year.
The EIA data had Wednesday last week shown that the US crude oil production had hit 11 million bpd during the previous week, when its net imports fell by 1.05 million bpd to average 6.36 million bpd.
Also, the report added that on Thursday that the US crude oil production would continue to increase through 2019 to hit record level.
EIA major forecast in its August Short-Term Energy Outlook suggests that the US crude oil production would average 10.7 million bpd in 2018 and 11.7 million bpd in 2019 and this figure if it works out means that US may further reduce purchase of Nigerian crude which may further drag down federal income and yearly budgetary operations.
