…Struggle to find buyers for July cargoes continues
OpeOluwani Akintayo, with agency reports
13 June 2018, Sweetcrude, Lagos — Nigeria’s crude has shown up in floating storage in northwest Europe, tracking report by Reuters has shown.
According to the report, the country’s crude had continued in the storage for the last three weeks, indicating an oversupplied market.
Further indicators showed that the remaining Nigerian Bonny Light cargoes from the June programme have been cleared, however, the July cargoes are struggling to find buyers.
The bulk of the 48-strong Nigerian loading programme was still not cleared as at last week, and traders said this was unusual, especially since it is getting close to the release of the August schedule.
Exports of the Bonny Light, produced by Shell, has been on force majeure for almost a month now after a leak in the pipeline and subsequent shut down of the facility.
Qua Iboe, the largest Nigerian crude grade, was offered at around $1.80 above dated Brent, compared with existing price of around $0.80, according to latest information.
Differentials for major grades such as Qua Iboe still looked like they could head lower, traders said.
Indicative of the hard times in the international oil market, Angola, Africa’s second largest oil producer, after Nigeria, is reportedly offering cargoes of its Girassol and Plutonio crude grades on a free-on-board basis.
Trading sources said roughly half of that country’s July loading programme was still available.
Flows of Angolan crude to China, the country’s major customer, have slowed in the last few months, largely as a function of competition from U.S. crude that now trade at fairly sizeable discounts to Brent-linked grades.
Consultant Kpler estimates exports of Angolan crude to China fell by 288,000 barrels per day, bpd, in May from the previous year to reach 703,000bpd.
“The overarching narrative around Angola remains consistent – natural upstream declines will likely continue to push down on export volumes over the long-run. May shipments were a sizable 209,000bpd year on year,” Kpler said in a note. “Even so, for now flows appear to have balanced out, with seaborne exports remaining within a 100,000-bpd bounded range since March.”
