LONDON — High freight rates and a wide backwardation continued to weigh on the market on Wednesday, making a large overhang slow to clear.
* Around 50 cargoes of October-loading west African were still available, with about 35 Nigerian, 10 Angolan and cargoes of Congolese Djeno, Ghanaian TEN and Jubilee.
* “For a VLCC to Asia, freight will be $3 a barrel plus another $1 a barrel lost to backwardation – that equates to some $4 a barrel before you consider the differential,” one trader said, illustrating the heavy cost after the major Saudi outage.
* Saudi Arabia’s oil minister sought to reassure the market on Tuesday night by saying that it could cover supplies from inventories and that production would be back by the end of September.
* Monthly curtailment meetings were taking place in Nigeria between producers and state firm NNPC, meaning that programmes would start trickling out on Thursday.
Also Read: Real crunch from Saudi Arabia’s oil outage has yet to be felt
* Exports of Nigeria’s Bonny Light have under force majeure since last week.
* India’s IOC issued a tender for West African crude loading in early November. Tender results are expected on Thursday.
* India’s HPCL issued a buy tender for November-loading crude, closing next week.
*Julia Payne, Editing: Pravin Char – Reuters
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