(Ecofin Agency) - The Nigeria National Petroleum Corporation (NNPC) has reduced the official selling price of Nigeria’s crude oil grades as parts of moves to make the country’s crude oil attractive to buyers and help recover its share of the global crude oil market.

According to a report by Bloomberg, the NNPC lowered its official selling prices for 20 out of 26 oil grades by at least $1 a barrel. It noted that the selling price of Qua Iboe, for November was reduced to a 17 cent premium to the benchmark Dated Brent, from $1.07 while the price of Bonny Light was reduced to a 7 cent premium and Forcados to a 41 cent discount to Dated Brent.

The Group General Manager, Crude Oil Marketing Division of the NNPC, Mele Kyari, stated that the price reductions was as a result of a huge cargo glut as the country makes efforts to regain market share.Like every other crude oil producer country, Nigeria is struggling with prices that are below half of what they used to be in July 2014 and the country’s situation is more severe thanks to militant attacks earlier this year that made export flows drop to the lowest in at least nine years.

However, shipments are slowly resuming, and the lower prices signify that Nigeria is looking to become more competitive in a presently overstocked market.

“It is a bearish signal for the light, sweet market. In order to capture a higher share of the market, official selling prices have to come down. Because an OPEC output cut would primarily affect medium and heavy crude grades, lower prices from Nigeria are likely to reduce the price differential between light and heavier oil forcing upstart producers seeking to reclaim market share - most notably Iran - to follow in Nigeria's footsteps and cut prices,” Eshan Ul-Haq, Principal Consultant at KBC Process Technology Limited, told Vanguard news.

Anita Fatunji