*As demand for Nigerian crude wanes
with agency reports
28 October 2015, Sweetcrude, Abuja – Surplus cargoes of Nigerian crude oil were slow to clear on Tuesday, even as Chinese buying helped Angola to fare better, traders said.
The 19 million barrels of November loading Nigerian oil are struggling to find buyers as Asian refiners start looking further ahead and Europe turned to the closer, and increasingly cheap, North Sea and Mediterranean grades.
According to one trader, “The outlook for Nigeria is not fantastic. Demand has slowed down massively.”
The United States, which had been a keen buyer in recent weeks, is now turning cold on West African grades as the discount of U.S. WTI crude oil versus dated Brent deepened, making foreign crudes less attractive.
“September and October were the peak arbitrage months,” one trader said of the Africa to United States flow. “There’s been a drop off in the (crude) we’re seeing go to the U.S.”
Chinese buying, along with other Asian tenders, had absorbed more of the December Angolan programme, traders said, though differentials have had to fall to enable the deals.
According to traders, there are still 20 November-loading cargoes with few spot buyers showing interest.
Exxon sold its last cargo of Qua Iboe. Though the buyer was not immediately clear, traders said it was likely to go to Europe.
Meanwhile, with several programmes pending, 60 cargoes were set for December loading, putting it largely on par with November.
The NNPC began auctioning annual crude term contracts on live television on Tuesday and vowed to cut the number of contract holders by a third in a drive to boost transparency at an institution dogged by corruption.
Angola, on the other hand, is looking eastward as Chinese buyers are helping to clear December programmes, with Cabinda possibly sold out.
Other tender purchases, including from Taiwan’s CPC, have helped to keep the December programme trading, but differentials have fallen.
Angola’s president has appointed a government team to help to reorganise Sonangol and its oil sector as it suffers from the oil price drop.