Differentials for Nigerian crude slides again as buyers rush in


LONDON, Aug 10 – Differentials for Nigerian cargoes slid again on Thursday, but the decline in prices has helped end a weeks-long deadlock between sellers and buyers and key grades such as Forcados and Bonny Light were seeing a steady flow of trade.

* Shell was offering cargoes of Bonny Light as low as $1.10 a barrel above dated Brent for delivery in August, and around $1.20-1.30 for September delivery, down from closer to $1.45-1.65 earlier this week, trading sources said.

* Forcados meanwhile saw fairly brisk business, as P66 and Petroineos took cargoes from Sahara and Vitol. Forcados was offered as high as $1.80 a week ago, but changed hands at $1.35, two traders said.

* Around half a dozen cargoes of Angolan crude were said to be still available from the September loading programme, including new grade Gindungo. Two cargoes were included in the original programme, one of which will be absorbed into the refining system of Total, which operates the Kaombo field that produces the grade, industry sources said.

* Brent-linked crudes are facing fresh headwinds from a less favourable arbitrage to Asia, after the premium of Brent crude futures to the Dubai market DUB-EFS-1M widened to almost $2.00 a barrel, and from a widening in the premium of Brent to U.S. crude futures to over $5.50.


* Traders of both West African and North Sea crude have said they expect to see an increase in U.S. exports given the growing discount of U.S. grades to Brent.

* Uruguay’s Ancap bought West African Nemba at a crude tender this week. Traders said Total was the seller.

* Indonesian refiner Pertamina is seeking to purchase three 950,000-barrel cargoes and one 600,000-barrel cargo of light, sweet crude for delivery between November and December. It was not clear yet who had won the tender, traders said.

* The North Sea physical oil market is letting off a distress signal – crude is once again being stored on ships – as production increases from major exporters threaten a fragile balance between global supply and demand.

Reuters data shows nearly 7 million barrels of North Sea crude held on ships that have been static for at least two weeks, unable to find immediate buyers, up from virtually nothing a few weeks ago. (Reporting by Amanda Cooper; Editing by Kirsten Donovan) ))

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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