Demand for Angolan crude from Chinese independent refiners and for Nigerian cargoes from European customers has breathed life into the West African market, traders said on Thursday.
A drop in freight rates for shipping West African crude to China is partly behind the pickup, but predominantly, it is the so-called teapots that have started stocking up again after a lull during December, traders said.
The benchmark VLCC rate for the WAF-Asia journey is around its lowest since September, having hit three-year highs in November, which dealt a blow to demand particularly for Angolan crude.
Chinese refiners have also been asking for Congolese Djeno, one trader said.
A shortage of distillate-rich crudes in the Mediterranean because of the drop in Iranian exports following U.S. sanctions has redirected some supply of the likes of Urals, Azeri or CPC away from northwest Europe, where refiners are instead turning to Nigerian grades.
Qua Iboe has changed hands at a premium of $1.75 to dated Brent this week, its highest in months, while supply of similar grades such as Forcados and Bonga were said to be virtually sold out.
* There are around a dozen Nigerian cargoes still believed to be available for sale but this is down from closer to 20 at the start of the week.
* In terms of tenders, Turkey’s Tupras awarded a tender for West African crude to Total. Traders said the grade involved was Forcados, while IOC’s tender for crude loading March 1-10 closed on Thursday, meaning the winner had not yet emerged.
* Around 10 cargoes of February-loading Angolan crude were still believed to be available for sale, broadly unchanged on Wednesday.