Reason #45 Why I Love To Blog -- February 21, 2019

The other day I mentioned that Algeria was the country most likely to be affected by the glut of light oil.

I was close, but no cigar.

For newbies: again, the current glut of oil has to do with the "right" kind of oil for the US, not oil "overall."

It turns out that Nigeria is likely to be affected first.

From oilprice: Nigeria could soon start cutting oil production. Saudi Arabia says it will stomp on Nigeria, enforce OPEC production cuts. Wow. Nigeria must produce a lot of oil. Let's look. The data points:

• production cut quota of 2.5% of 1.7 million 
• a cut of 40,000 bopd

But apparently Nigeria, actually increasing production by another 200,000 bopd or about 10% of Nigeria's total production.

Whatever.

Two things.

First: Nigeria's oil has an API that translates to "medium-high oil," the very same API range as that of Saudi Arabia.

That's the very same segment that the world wants.

Second: I think this is the bigger story. If Saudi Arabia is going to stomp on a fellow OPEC member who had a quota cut of 40,000 bopd -- that is further evidence that Saudi Arabia is in deep trouble. Saudi Arabia cannot even afford competition from a small player any more.

Nigeria's oil: