Buyers shun Nigeria’s January crude cargo.

Nigerian crude cargoes for January
loading are struggling to sell with
almost half of the program still
available due to very weak demand
with an oversupply of sweet
crudes, market sources said.

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.
Activity on Nigeria was slow
especially for key grades such as
Qua Iboe, Bonny Light, Bonga and
Forcados.
Some niche grades like Akpo, Usan
and Agbami have sold decently
but the whole Nigerian sweet crude
complex was being dragged down
by the weak demand.
“The market is in disaster mode,”
said a trader. “There is just no
demand for these Nigerian grades
at the moment. There is too much
oil to choose from. Even the Azeri
Light values are coming crashing
down.”
Nigeria’s flagship grade Qua Iboe
was assessed at Dated Brent plus
$0.72/b on Monday, the weakest
since April 24, 2009, Platts data
showed.
Traders said there were still more
than 30 Nigerian January loading
cargoes unsold, and with the
Nigerian February program
expected later in the day,
differentials were expected to fall
steadily if demand did not
materialize.
“The arbitrage east is almost
closed and the OSPs in Middle
East are very cheap. The Brent/
Dubai spread is wide. There are
plenty of alternatives for [Asian]
refiners instead of WAF. And, the
European refiners are spoilt for
choice,” the trader added.
Sources said some offer levels for
Qua Iboe, Bonga and Erha had
been quite high and as a result a
standoff was observed with no
buying interest heard at these
levels. Despite weak demand some
of these offer levels had not yet
come off.
Qua Iboe was still heard offered at
Dated Brent plus $1.20/b and
sources said with the provisional
February program due later in the
week, values could fall sharply if
these cargoes did not trade.
A second trader said: “The
Angolan January program is sold
out thanks to the Chinese but on
Nigeria, we still have almost 40
million barrels left [including] some
December barrels on storage. The
market is very long, in WAF and in
the Med.”