Against the backdrop of oversupply of crude oil cargoes from both the January and February programmes, Nigerian crudes continued to fall at a steady pace due to weak demand, trading sources said on Monday. Almost all of the key Nigerian crudes were said to be at multi-year lows, and with the picture looking even more bearish, values were expected to decline further. The country’s flagship grade, Qua Iboe, was pegged close to Dated Brent plus $0.50/barrel on Monday afternoon. It was assessed at Dated Brent plus $0.51/b Wednesday, the lowest since April 22, 2009, Platts data showed. The Nigerian market remained oversupplied with approximately 20 million barrels for January still available along with almost the entire February programme. Traders said that as a result, crude values were expected to fall, especially with such weak buying interest from Asian and European refiners. Asian and European demand for Nigeria and other West African cargoes has been slow so far, exacerbated by high freight rates and the availability of cheaper sweet crudes in both regions, according to Platts. “There is a massive overhang [on WAF],” a trader was quoted by Platts as saying. “The Middle Eastern producers are encroaching on WAF buyers. They are offering eye-watering discounts. If I can buy a Murban at a $2/b discount versus Bonny Light, then Bonny Light has to come down [heavily] to compensate for the freight differentials for it just to compete. I wouldn’t be surprised if Bonny Light and Qua Iboe go to Dated Brent plus $0.30/b soon.” Similarly, the light sweet Agbami was pegged near Dated Brent minus $0.90/b on Monday, and this grade was assessed at Dated Brent minus $0.86/b on Friday, the weakest since November 12, 2012, according to Platts data. Traders said the January 30-31 Agbami stem had been sold by a trader at Dated Brent minus $0.90/b but details of the buyer could not be immediately confirmed. Traders said Agbami January cargoes were being offered weaker than Dated Brent minus $0.50/b and with both gasoline and naphtha cracks very weak, naphtha-rich light sweet crudes such as Akpo and Agbami were falling sharply. “Naphtha cracks are terrible, the light [crudes] are suffering,” the trader said. “The ultra-light crudes [like Agbami] are in worse condition. The February programme for Agbami hasn’t moved at all.” The Organisation of Petroleum Exporting Countries had in its latest monthly oil report predicted lower global oil demand for this year and 2015. OPEC, which supplies about 40 per cent of the world’s oil, forecast that the call on the group’s crude would drop in 2015 to its lowest level in 12 years. The projected demand for OPEC crude will be just under 29 million bpd as a result of non-OPEC supply expected to grow by 1.36 million bpd in 2015, according to the 12-member cartel. posted on December 30, 2014 at 12:35AM jtnng.blogspot/
Posted on: Tue, 30 Dec 2014 00:08:10 +0000