VOLATILITY AND PRESSURE ON OIL PRICING IN EARLY JULY 2016

Oil prices fell 5 percent to two-month lows on Thursday July 7, 2016 after the U.S. government reported a weekly crude draw in line with forecasts It was a disappointment to the market that was expecting larger draws.

Reuters reported that Brent crude also lost the most in a session since February as the global benchmark and U.S. crude futures broke key technical support they had defended for nearly two weeks since a selloff on Britain’s shock vote to exit the European Union.

Oil broke support levels after the Energy Information Administration (EIA) said crude stockpiles fell 2.2 million barrels for the week to July 1, just below a 2.3-million-barrel decline forecast by analysts in a Reuters poll.

The news from Nigeria continues. Royal Dutch Shell's Nigerian division lifted a force majeure on exports of Bonny Light crude oil on Thursday, the latest sign that Nigeria's oil production is recovering after being hit by militant attacks in its oil-rich delta region. However, a Nigerian militant group maintained it was not negotiating a suspension to hostilities with the government, claiming responsibility for an attack on Chevron. The Niger Delta Avengers surfaced early this year, launching a militant campaign against national and international energy companies working in the Niger Delta. The group accuses the government of Nigerian President Muhammadu Buhari of favoring oil and gas interests over the interests of the people in the Niger Delta.

Clipper Data highlights how Nigerian crude exports have held up well in recent months, it also shows how certain grades such as Bonny Light and Brass River have dropped to their lowest level for the year.

To offset these losses, other grades have increased, and as Qua Iboe ramps up again, crude exports are increasing once more but Nigerian oil workers go on strike. Clearly a sign of volatility in the Region.

The only good news remains the demand from China that continues to be steady but for how long as dark clouds seem to accumulated on the Chinese economy.