Demand for European gasoline has fallen sharply, taking prices with it, hit by the effective closure of the Nigerian import market as the general strike over the government's decision to abandon a domestic fuel subsidy moves into its fifth day.
The decision to end subsidies on imported fuel has caused domestic fuel prices to nearly double and triggered the national strike.
"The trading of Nigerian-quality barrels in NWE has come to a halt," a European gasoline source said. "There have been significantly lower values on [European] premium unleaded [gasoline] as a consequence."
Nigeria is a major importer of European-produced gasoline from the Antwerp-Rotterdam-Amsterdam refining region, and the loss of Nigerian demand has led to a sharp fall in the trading activity of Nigerian-grade gasoline.
"As far as I'm aware, the ports [in Nigeria] are shut and no one is buying Nigerian grade gasoline in Europe," a gasoline source specializing in the West African market said. "With everything up in the air, there's been a halt on demand in Northwest Europe."
Nigeria imports a significant amount of European-produced gasoline, much of it priced against the Platts FOB Rotterdam 10 ppm quote.
Shipping sources said this week that the strike had halted off-loadings of refined products cargoes following the closure of the country's ports.
"Any of the guys trying to deliver into that market are basically sitting on their hands," the second source said. "No one knows what's likely to happen over the next several days."
On Thursday, FOB Rotterdam 10 ppm barges were assessed at $970/mt, or a premium of $3/mt to FOB Rotterdam Eurobob barges at $967/mt. This is a substantial departure from pre-strike differentials of $15-16/b during the last two weeks of last year, Platts data shows.
