Nigeria crude struggles with oversupply; arbitrage helps Angolan

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LONDON, July 26 – Nigerian crude differentials stayed under pressure on Thursday, with buyers citing a persistent overhang of cargoes and delays to loading programmes as grounds to be more choosy.

A decision by Saudi Arabia to temporarily halt oil shipments through a key Red Sea strait after an attack on two supertankers was not expected to have much of a knock-on effect on the West African market, traders said.

NIGERIA
* Qua Iboe was last heard offered at around $1.65 above dated Brent for August loading. For September, traders said this grade would have to fall to around $1.50, from recent offers of $2.00, given the overhang in the Nigerian market.

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* Erha was heard around $1.65 above dated Brent for August loading, one trading source said.

* Delays to September Nigerian programmes, including Forcados, are keeping potential buyers wary, one shipping source said.

ANGOLA
* The recent drop in the premium of Brent-linked crudes to Dubai has helped encourage Angolan cargoes to move east more quickly. State firm Sonangol was thought to have almost sold out of its September programme. DUB-EFS-1M

* At the last count, Sonangol had cargoes of Cabinda, Dalia and Saturno, ranging from parity with dated Brent to discounts of closer to $1.00.

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* Saudi Arabia said on Thursday it was suspending oil shipments through a strategic Red Sea lane after Yemen’s Iran-aligned Houthis attacked two tankers in the waterway, underscoring the risk of an escalation in tensions in the region.

* India’s Hindustan Petroleum Corp (HPCL) HPCL.NS cancelled the purchase of an Iranian oil cargo earlier this month after its insurance company refused to provide coverage for the crude because of U.S. sanctions, three sources with knowledge of the matter said.

* Iran for its part has offered to insure oil cargoes to India after some local insurers stopped providing the service in the face of impending U.S. sanctions, industry sources said.

* Total’s CFO says the start-up of Angola’s Kaombo North will take place in “a matter of days”.

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TENDERS
* Taiwan’s CPC has bought nearly 8 million barrels of sweet crude for October delivery via a tender, trade sources said on Thursday. The purchase includes 4 million barrels of U.S. WTI Midland crude, 2 million barrels of Algerian Saharan Blend and more than 1 million barrels of Azeri Light crude. (Reporting by Amanda Cooper; Editing by Kirsten Donovan) ))