A Review of the Nigerian Energy Industry

Nigerian crude oil grades see strong activity

Oil prices17 August 2013, Lagos – Nigerian crude values rose last week as trading for the nation’s August crude oil cargoes picked up pace, with grades such as Qua Iboe, Escravos, Forcados and Erha seeing strong activity on the back of India buying and uncertainty of supply from Libya, which are pushing up differentials.

The Qua Iboe grade firmed to its highest price level since early May, partly due to strong demand from Indian buyers as the Brent premium to Middle East grades eased. It was offered at around Dated Brent plus around $3 a barrel, traders said.

Traders reported an increase in activity at the start of the week after a very slow start to trading for the September-loading programme seen the previous week.
Strong Indian demand was cited as an important factor behind stronger prices and it is estimated that at least 10 million barrels from the 54 million barrel September programme had been sold to India.

Sources said refining margins were not particularly strong but were enough to provide support to the Nigerian light sweet crudes while continued supply problems in Libya were helping light sweet grades in West Africa.

“There is support for Nigerian grades; they are moving quickly on continued Libyan disruptions,” said a trader, according to Platts.

Crude differentials for almost all the Nigerian grades were starting to rise steadily after a quiet few weeks.

Indian state-controlled oil and gas company Bharat Petroleum Corporation Limited was said to have bought a cargo each of Qua Iboe and Yoho for September loading from
ExxonMobil in a recent tender. Sources said the Indian refiner will take the Qua Iboe Sept 8-9 and Yoho Sept 9-10 stems.

Hindustan Petroleum Corporation Limited and Indian Oil Corporation Ltd also took two Qua Iboe cargoes each for September loading.

Qua Iboe was assessed at Dated Brent plus $2.62 per barrel (per barrel) last Monday, according to Platts data.

Another source said Qua Iboe September cargoes were being offered at Dated Brent plus $3.10 per barrel.

Grades like Erha and Forcados were said to be selling well also, with the latter being offered close to Dated Brent plus $4pb. Some of the lighter grades, such as Akpo and Agbami, were also selling fairly well.

– Femi Asu, Business Day

In this article

Join the Conversation