Nigerian oil differentials fell to their lowest in more than a year on Friday as surplus cargoes struggled to find outlets in a market oversupplied with light crude oil.
* While OPEC’s promised cuts have helped to underpin oil price benchmarks, the Atlantic Basin was oversupplied with light crude oil. Libya, which along with Nigeria was exempted from cuts, was loading its first Sharara crude cargo in over two years this week.
* U.S. East Coast refiners are in the midst of their biggest buying spree of Algerian crude in years as they take advantage of cheap oil spilling out of the region, creating further competition for West African sellers of light crude.
* The Nigerian National Petroleum Corporation (NNPC) had issued a tender for 2017 crude-for-oil product swap contracts, according to a tender document seen by Reuters.
* Nigeria’s state oil company has proposed legal amendments aimed at enabling the government to increase royalties and other revenues from deepwater oil production.
ANGOLA
* Total was still offering a February-loading cargo of Girassol, but the programme was otherwise largely sold.
* The March programme was expected early next week.
* Strong demand in Asia, particularly China, helped the programme sell out quickly.
* China’s crude oil imports jumped to a record high in December, and its largest state-run producer expects demand to increase by some 3.4 percent in 2017.
NIGERIA
* Despite an Indian tender absorbing several Nigerian oil grades, around 25 February-loading cargoes were still looking for homes less than a week before the next loading programme was due.
* Sellers slashed premiums for Qua Iboe, Nigeria’s largest export stream, to as low as 50 cents per barrel versus dated Brent, with traded values expected below that.
* After the cuts, Oando and Trafigura managed to sell Qua Iboe cargoes for mid- and end-February loading, respectively.
* Litasco and Total purchased them at prices that traders said were below 50 cent premiums.
* The unreliability of loading plans, with Qua Iboe exports delayed due to strike action late last year, was also make buyers less keen to take it.
* Bonny Light offers were scarce, but traders said its values were also under pressure along with most of Nigeria’s export programme.
TENDERS
* Traders ExxonMobil and Total had won a tender to supply Indian Oil Corp with 4 million barrels of crude oil. Exxon will supply Qua Iboe and Zafiro and Total will supply Agbami and an unspecified Angolan grade, traders said.
