Business

West African crude market under pressure due to plentiful supply

West African crude cargoes were slow to move on Tuesday as differentials remained high amid plentiful supply of both Nigerian and Angolan grades, trading sources said. Traders said buyers still considered prices as too expensive amid a flood of U.S. crude grades coming towards refining systems of oil majors and Chinese refineries.

In Angolan grades, most cargoes were still said to be available for the second half of July although those loading in the first half of July have pretty much sold. In Nigerian grades, the July programme was assessed as “super long” with the bulk of July still left to sell as well as a handful of June loading barrels.

ANGOLA

* Sonangol was said to be offering a cargo of late-June loading Dalia at a discount of $1.50 a barrel to dated Brent, down from around a discount of around $1.30 late last week, but found no buyers. Traders said it was likely to trade closer to a discount of $2.00 after missing the chance to sail to China this month. * Unipec was still offering cargoes of Girassol at a discount of around $0.25 to dated Brent, having offered as low as $0.40, as well as Plutonio at around $1.00 below the dated price and Ghanian Jubilee at parity with dated Brent, trading sources said.

NIGERIA

* About half a dozen cargoes of June-loading Nigerian cargoes are still seeking a buyer, while the July programme is still mostly available. * At least one VLCC, the Arosa, is anchored off the Scottish terminal of Finnart, where it has sat for almost a month fully laden with Qua Iboe crude, according to Reuters ship-tracking data. Traders have said in the last couple of weeks that the northwest European market is proving fairly sluggish. A large influx of U.S. crude, as well as a few Middle Eastern grades such as Iranian and Basra Light have undermined demand, while an ongoing force majeure on exports of Bonny Light crude has added to the reluctance by refineries to purchase Nigerian grades.

* A Shell spokesman said on Tuesday the force majeure remained in place on shipments of Bonny Light. STORIES

* Saudi Aramco has raised its July price for its Arab Light grade for Asian customers by $0.20 a barrel versus June to a premium of $2.10 a barrel to the Oman/Dubai average, it said on Tuesday. The company raised its Arab Light OSP to Northwest Europe by $1.80 for July from the previous month at a discount of $2.40 a barrel to the ICE Brent. The Arab Light OSP to the United States was set at a premium of $0.90 a barrel to the Argus Sour Crude Index (ASCI) for July, up 20 cents a barrel from the previous month.

* The United States government has unofficially asked Saudi Arabia and some other OPEC producers to raise oil output, three OPEC and industry sources said on Tuesday, although it has not requested a specific figure. * Indian private refiner Nayara Energy, a key buyer of Iranian oil, is prepared to replace Iranian oil if required under U.S. sanctions and hopes to settle dues owed to Tehran for past purchases ahead of a November deadline, its chief executive said.

* Indonesia plans to quadruple its diesel subsidies to keep prices for the fuel unchanged through 2018 in spite of high global oil prices and a weak rupiah, the finance minister said on Tuesday.

TENDERS

India’s MRPL was seeking a 600,000-barrel cargo of sweet crude for delivery in early August. The tender was due to close on June 6. Uruguay’s ANCAP is looking for 1 million barrels of light sweet crude for delivery in late August. The tender was due to close on Wednesday. Reuters