Nigeria Steps Up Crude Capacity, but Threats Remain

The January start of the Egina field added to Nigeria’s crude oil productive capacity, but Nigerian production will remain close to 1.65 million b/d while the OPEC+ production deal is in place. By the end of 2019, production could grow to 1.70 million b/d. While bigger gains are possible, prospects are clouded by renewed threats from insurgent groups in the Niger Delta, whose campaigns have crippled oil infrastructure in recent years. The January start of the Egina field added to Nigeria’s crude oil productive capacity, but Nigerian production will remain close to 1.65 million b/d while the OPEC+ production deal is in place. By the end of 2019, production could grow to 1.70 million b/d. While bigger gains are possible, prospects are clouded by renewed threats from insurgent groups in the Niger Delta, whose campaigns have crippled oil infrastructure in recent years.

Bearish Naphtha & LPG Dominate NGL Outlook

For the LPG and naphtha markets, there will not be enough global demand to absorb available supply in 2019. The result will be continued bearish pricing for both products. This month’s outlook singles out the potential for China to impact the balances of both products. In the LPG market, accelerating Chinese growth will provide a helpful outlet for more LPG. In the naphtha market, however, Chinese imports of reformate for gasoline blending are rapidly vanishing, adding to the long list of bearish factors shaping naphtha fundamentals. Ethane stands alone on the bullish side of the ledger.