Thursday, July 17, 2014

Crude oil price weighed down by weak demand

Crude oil price differentials for Nigeria stayed under pressure, Friday, having fallen this week, weighed down by weak demand from large Asian buyers.
Nigeria’s largest stream, Qua Iboe, was assessed at its lowest premium to dated Brent in two years. Refining margins in Europe and Asia have been weak, curbing non-essential buying interest, say traders. “Margins and cracks have improved, but it does not seem to changed things very much,” said one.

With ample supply of Nigerian crude and differentials under pressure, traders suggested majors could keep August-loading cargoes for their own refineries.

Around 40 cargoes for August loading out of a total of 65 are available, a trader said. Qua Iboe end-August cargoes offered at dated plus $1.90, a trader said, versus up to dated plus $2.20 earlier this week. The grade was assessed at dated plus $1.30-$1.40, steady from Thursday and the lowest since July 2012, Reuters data showed.
Several of August’s 13 cargoes have been placed into tenders, although there have been few spot trades so far.
Royal Dutch Shell has yet to lift a force majeure on output from its EA field in Nigeria that was declared in June, a company spokesman said on Friday.

Differentials looked to be drifting lower, pressured by a lack of demand. Cabinda offered at dated Brent minus $2.00, a trader said, lower than on Thursday.  Girassol offered at dated minus 65 cents on Thursday, weaker than previously heard.
Indian Oil Corp is running a buying tender, which a trader expected to absorb September barrels.
 - Reuters

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