W. Africa Crude-Uptick in U.S. exports threatens to squeeze WAF grades

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LONDON, June 4 (Reuters) – Interest picked up for Angolan grades on Tuesday after sellers lowered prices, but market structure and high freight costs have hit demand, and a recent rise in exports of medium crudes from the United States may displace West African oil.

* U.S. medium-sour grades like Mars Heavy are in high demand amid U.S. sanctions on Iran and Venezuela, and more crude produced in the U.S. Gulf of Mexico is being piped for export from Louisiana instead of to domestic refiners.

* Three crude cargoes have been loaded there since Friday, including one chartered by Shell and two supertankers chartered by Mercuria and China’s Unipec, a major buyer of Angolan.

* Still, a cargo of medium-sweet Angolan CLOV was underway en route to Louisiana, according to Refinitiv tradeflow data, a rare import for the U.S. Gulf coast.

* Refining profit margins for jet fuel inched down by two cents to $14.14 a barrel over Dubai crude during Asian trade on Monday, further denting Asian demand.

* Cargoes from Angola’s new, high-sulphur Mostarda stream struggled to find buyers.

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* China’s Unipec was offering a cargo at a 30 cent premium to dated Brent for loading July 1-2, Total another for loading 19-20 and Angola’s Sonangol a third for July 28-29.

* Lighter Nigerian crude grades were still being offered at high prices, but European buyers balked at high prices such as around $3.00 above dated Brent for Bonny Light, citing low refining margins.
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* India’s IOC issued a tender for a West African grade for loading between August 1-10 due to close on Thursday.
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* Lower oil prices are starting to rebalance the oil market by slowing the rise in U.S. crude output and encouraging Saudi Arabia and its allies to extend production cuts through the end of 2019. (Reporting by Noah Browning; editing by David Evans)

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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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