LONDON, JUNE 7, 2018 – Differentials for Nigerian and Angolan crude were unchanged on Wednesday, suppressed by a lack of buying appetite as competition from U.S. grades in key consumer markets remained strong.
The premium of Brent-linked crudes to U.S. grades is hovering near $11 a barrel, which has prompted typical buyers of Nigerian and Angolan crude, such as Indian and Chinese refineries, to take an increasing number of U.S. cargoes.
Nigerian crude has even shown up in floating storage in northwest Europe in the last two weeks, according to Reuters tracking data, in a sign of what traders said was a clearly oversupplied market.
ANGOLA
Songangol sold its two remaining July-loading cargoes of Dalia, which had been offered down to around a discount of $1.50 to the dated Brent price, although one trading source said this differential would have had to fall to nearer $2 to really draw any buyers out of the woodwork.
NIGERIA
Sellers of Nigerian cargoes were still commanding premiums that were too high to see many cargoes clear, two trading sources said. “By this point in the month, you would have expected Angolan cargoes to be sold out and for Nigerian to be moving, but it’s not happening right now,” one said.
There are still a handful of June-loading Nigerian cargoes, including Bonny Light and Yoho grades, another trader said.
With so little demand, equity holders were said to be likely withholding some cargoes that would eventually end up back in their own refining systems to avoid putting additional pressure on differentials, traders said.
