with agency reports
23 November 2015, Sweetcrudereports, Abuja – Higher exports of January loading Nigerian crude oil on key grades that emerged on Friday added to a large backlog of unsold cargoes, putting further pressure on already weak differentials.
Qua Iboe and Bonny Light exports for January will both be higher than for December, while around 30 million barrels of oil for the earlier month are still available for sale, traders said.
Making sales to Asia of Nigerian and Angolan oil more challenging, dated Brent’s premium to Dubai oil was around its highest since July 2014 DUB-EFS-1M.
This makes West African grades, priced against the North Sea benchmark, less competitive relative to Middle Eastern oil.
Angola’s Sonangol has increased initial offers on its oil for January export compared to the previous month, but traders said that they would struggle to achieve buying interest, as buyers were scarce and competition from oil from other regions fierce.
December official selling prices for Nigeria’s largest stream, Qua Iboe, as well as Bonny Light, hit their lowest levels in more than 10 years, highlighting the toll the fight for market share had taken on selling prices.
Royal Dutch Shell was awarded this week a tender to sell Uruguay’s state-run oil firm ANCAP a 1-million-barrel cargo of Nigeria’s Bonny Light crude for December delivery, traders told Reuters.
Nigeria aims to produce up to 30 percent of its domestic gasoline needs by the first quarter of 2016 after its refineries resume production over the next few weeks following an overhaul, the country’s top refinery official said.
One source of demand is India’s IOC. It has issued a second tender for January crude after buying as much as six million barrels in another tender.
The Brazilian major emerged on Friday, taking the total number awarded to the Indian refiner to 6 million barrels, far higher than the usual awards of around 2-3 million barrels.
Reports indicated that there were around 30 of the 62 December loading cargoes still available.
It noted, however, that tenders due next week from HPCL, BPCL and CPC could help absorb some of the excess availabilities.