W. Africa crude-cargoes linger as China demand slows

Lower differentials to dated Brent helped Angola shift more of its October loading cargoes, but roughly a third of the programme was still searching for outlets, traders said.

While buying in Europe picked up partially on the back of lower Suezmax shipping costs, there is still strong competition for crude oil buyers in the Atlantic Basin.

“Freight is really low at the moment,” one trader said. “That’s the only thing helping West Africa.”

The just under 20 cargoes of Angolan crude still seeking buyers is well above the amount typically left with two weeks to go before the next loading programme.

Nigerian oil is faring better, compared with earlier this year when state oil company NNPC was forced to cut official selling prices to 10-year lows for some grades.

A key buyer for China, Unipec, held back from significant buying, traders said, leaving a tough gap to fill for Angolan crude.

The battle for China’s oil buyers could increase; this week, Russia’s Rosneft also said it would significantly increase its oil sales to China as it looked to diversify away from Europe.

Saudi Aramco is also fighting for Asian buyers; it cut its October official selling price for Arab Light to Asian customers by 30 cents a barrel from September.

While buyers in Europe and the United States have been picking up some of the slack for now, there is still a large backlog that some traders said is forcing sellers to agree to prices well below what they are asking for publicly.

While Nigeria’s Qua Iboe traded at a $1.50 per barrel above dated Brent earlier last week, traders said it was a distressed purchase, possibly made to meet a tender to India.

There are still a handful of Que Iboe cargoes for October loading, and traders said September loading Qua was offered at closer to $1 per barrel above Brent.

Meanwhile at least 30 cargoes of October loading crude, and some 5 million barrels loading in September are still on offer.

Traders said spot deals were minimal as most awaited tender awards.