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Asia, Europe Rush Nigerian Crude Oil As U.S. Import Falls

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Nigerian Crude Oil

U.S. crude oil imports from Nigeria in July plunged to the lowest level in three years and are continuing to slip as Asian and European buyers increase purchases, trade flow data from Thomson Reuters and market intelligence firms Genscape and Kpler, shows.

A narrowing spread between benchmark Brent and Oman crude futures , trading at less than $2 a barrel compared with more than $4 in May, has made Nigerian crude more attractive to Asian buyers than U.S. refiners.

World Energy News, quoting Thomson Reuters trade flow data said Nigerian crude exports to Asia hit 664,000 barrels per day (bpd) in July, the highest in two years.

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That shift cut Nigerian crude arriving at the U.S. East Coast in July to 1.3 million barrels, or about 43,000 bpd, the lowest since June 2015. That was down from 7.3 million barrels, or 244,596 bpd, in June, according to the trade flow data. The East Coast refiners have limited access to shale flowing from Western fields and tend to run imported crude.

The decline is poised to continue. August U.S. arrivals from Nigeria are tracking to 91,800 bpd, according to the flow data, down from 242,000 bpd in the same month last year.

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“The drop in Nigerian crude appears driven by price spreads, with less crude being pulled into the U.S. and more heading to Asia in recent months,” said Matt Smith, director of commodities research at tanker tracking firm ClipperData.

European imports of Nigerian crude also rose in July, to 602,000 bpd, from 419,000 bpd the previous month, according to Thomson Reuters.

Only two oil tankers, the Marshall Islands-flagged Seacharm and the Liberia-flagged Pserimos chartered by oil trader Vitol SA, carried Nigerian crude to the U.S. East Coast in July, discharging in Philadelphia and Delaware Bay. That was down from eight tankers in June, the data show.

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U.S. East Coast refiners took in slightly more domestic waterborne shipments from the Gulf Coast, adding 16,000 bpd between June and July. Deliveries from Algeria, Russia and Canada also helped offset the drop from Nigeria, increasing by a combined 181,000 bpd in July, according to Genscape.

“The lion’s share of the decrease in incoming Nigerian imports to the East Coast was offset by imports from other countries,” said Dylan White, a Genscape oil markets analyst.

NAN

Business News

Boeing Shares Continue To Slide As Countries Ground 737 MAX Planes

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Boeing Shares Continue To Slide As Countries Ground 737 MAX Planes

Boeing shares have continued to slide on Tuesday as a growing list of countries move to ground the aircraft manufacturer’s 737 MAX model jets after the crash of an Ethiopian Airlines flight on Sunday killing a hundred fifty-seven persons.

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Boeing’s stock price has fallen nearly twelve percent since the accident, erasing roughly twenty-eight billion dollars in value amid concerns the accident could have links to last October’s crash of a 737 MAX 8 operated by Indonesia’s Lion Air. A hundred eighty-nine persons died in that one.

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Although experts warn that it’s too early to know what caused the Ethiopian Airlines crash, both crashes occurred shortly after takeoff. Experts say, that suggests a possible connection.

Bloomberg reports the Boeing 737 is the best selling aircraft in history.  The MAX is its newest version, with more fuel-efficient engines.  It is also generates almost one-third of the airline maker’s operating profit.

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Business News

SA Banks Stop Supply Of US Dollars To Zimbabwe

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SA Banks Stop Supply Of US Dollar To Zimbabwe

South African banks have stopped supplying Zimbabwe with U.S Dollar notes saying they want to avoid risk. They cite Zimbabwe`s loss of a hundred correspondent banking relationships in the past few years because of the country`s high risk rating.

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South African banks have been the major sources of U.S dollars for Zimbabwe since 2009.

Zimbabwe Reserve Bank Director, William Wanimanzi says the development is a result of the country`s failure to follow proper dollarization procedures, signs of which he said are now catching up with the country`s fragile economy. He said the country is not officially dollarized because it does not have an agreement with the United States government to use its currency. He says this will make it difficult to take in cash into the economy.

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African News

Zimbabwe Central Bank Abandons Quasi Dollar

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Zimbabwe Central Bank Abandons Quasi Dollar

Zimbabwe Central Bank has abandoned the quasi dollar it introduced in 2016.  The peg of one Zimbabwe dollar to one US dollar has not worked as the black market rate has been in the range of three and a half to four Zimbabwe dollars to one U.S. dollar.

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Economists say this move could lead to jitters in countries that hold the peg, including Saudi Arabia and Hong Kong.

Zimbabwe has long been dealing with currency instability that in 2009, it introduced the US dollar, euro, and the South African rand as legal tenders it thought would stem the wild round of hyper-inflation.

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