London - Nigerian crude oil differentials came under renewed selling pressure on Monday as unsold cargoes competed with limited buying interest from Asia and Western markets.
As many as 20 Nigerian cargoes for loading in July remained unsold and on offer, traders said, just a week before the new loading programmes for August were due to be announced. Several light Nigerian crude oil grades saw their asking differentials squeezed lower, particularly those with relatively high yields of naphtha and gasoline, markets that have been depressed in recent weeks.
One grade, the ultra-light crude Agbami, which is so light it is sometimes classified as a condensate, has been sold at least once at a substantial discount to the North Sea benchmark, dated Brent, which is considered of inferior quality.
"Most of the Nigerian grades have suffered from low demand in recent months," said a physical crude oil trader with an independent commodities house. "Naphtha grades have been hit particularly hard as crack values have narrowed and Mediterranean grades are more competitive."
Nigeria's benchmark Grade, eased 5 to 10 cents per barrel to around dated Brent plus $1.80/$2.00, about 30-40 cents below levels only a week ago. A cargo was heard offered at dated plus $2 a barrel and two cargoes were reported done below that level. Bonny Light, assessed at Qua Iboe, minus 20-30 cents.
Chevron was reported to have sold an Agbami cargo for July 14-15 to Petrobras as low as dated Brent minus 75 cents, at the bottom of a reported talking range of minus 50-75 cents.
Angolan state oil company Sonangol has already sold all its cargoes for July ahead of the loading programme for August, due to be released at the end of this week.
Asian buying tenders
India's largest refiner, Indian Oil Corp (IOC), bought up to 4 million barrels of West African crude in a tender for loading in the second half of July, traders said. IOC bought 1 million barrels each of Hungo and Agbami from Shell, plus 950,000 barrels of Kissanje from Sonangol and 950,000 barrels of Dalia from Mercuria, they said. Prices were not immediately available. IOC last bought a Kissanje cargo from Sonangol.