West Africa Crude-Nigerian differentials rise after BP bids for swaps-linked grades

04 Sep, 2018

NIGERIA

BP, which is less active in the West African physical market than in other hubs such as the North Sea or the Mediterranean, was once again bidding for cargoes of the various major grades of Nigerian crude including Bonny Light, Qua Iboe, Forcados and Bonga, traders said.

The four grades are Nigeria's largest and used to underpin the contracts-for-difference swaps market. BP was said to be bidding for cargoes of all four loading in late October at a premium of $1.70 a barrel above the dated Brent price.

This marks a rise of at least 5 cents on indications seen on Monday in the daily trading window.

ANGOLA

Around a dozen of the 49 cargoes in Angola's October-loading crude were believed to be still available for sale, down from above 20 a week ago, one trading source said.

State oil company Sonangol has sold out of October cargoes, two traders said.

RELATED NEWS

Asian refining margins for 10ppm gasoil surged to their highest in about three years on Tuesday, topping $17.30 a barrel, up from closer to $17 late last week.

In theory, the arbitrage to Asia is a lot less favourable for Angolan crude to head to China. The Brent/Dubai spread is back at its widest in two months. At $3.20 a barrel, the premium of Brent to the Dubia benchmark is double what it was a month ago.

But with the prospect of a loss of more sour grades from Iran in just two months' time and healthy refining margins, demand for competing crudes such as Angolan and Russian Urals is helping to support differentials for these grades.

Copyright Reuters, 2018
 

 

 

 

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