Nigerian crude exports is said to be facing a difficult demand picture as delays and freight costs weigh on crude exports. According to a report from the London Future Exchange a slide in price offers in recent days is boosting sales however and clearing October cargoes, with Qua Iboe selling for a little over $2.50 above dated Brent. The report said that a force majeure declared by Shell last month remains over exports of major grade Bonny Light, revising the export programme late on Thursday to reflect further delays, projected at between two and five days.
The report said that the repeated delays to the export schedule have led to uncertainty which have kept buyers wary, traders said. Tenders by India’s IOC for two cargoes of West African crude for November closed, but the winners did not immediately emerge. It further said that an exploration and production unit of China’s state energy giant PetroChina has drilled into high flows of natural gas and condensate in an exploration well in the northwestern region Xinjiang, in what could be another major gas find. Bernard Looney, who will replace Bob Dudley as chief executive of BP when he retires next year, faces the tricky task of navigating the energy major through a rising tide of environmentalism and move to a low-carbon economy.
The report further said that offers for Angolan crude slipped further on Friday but remained not far from all-time highs as a sudden spike in freight rates last week dampened demand. Angolan state oil company lowered its offer for a cargo of November-loading Cabinda at a premium of $3.10 compared to dated Brent, down 40 cents from the day before. It was also offering a cargo of Dalia at $2.80 and Gindungo at $1.60. China’s Unipec re-offered three Angolan cargoes, lower by at least 50 cents each. It offered Dalia at $2.50 above dated Brent, Saturno at $1.30 and Mostarda at 65 cents. The jolt to shipping rates after the United States imposed sanctions on divisions of Chinese shipping fleet Cosco made the journey from West Africa to East Asia far less attractive, leading to the drop in prices by sellers. Heavy sweet grades such as Angolan Dalia and Nigerian Forcados were still being offered near all-time highs ahead of IMO 2020 rules for shipping fuel due on Jan. 1. Bunkering hub Singapore is well-supplied with low-sulphur fuels, likely avoiding any market chaos around the time of the transition, but demand for suitable oil remains high. Australia’s Santos sold a cargo of heavy sweet Van Gogh crude at a premium of around $13 a barrel to dated Brent, traders said, up from about $8 last month — another sign of sky-high demand for such oil grades.
