West Africa Crude: Angola diffs at five-year lows as supply increases

An increased supply of Angolan crude oil for September export added further pressure to differentials on Thursday, with a large overhang of West African cargoes from previous months dragging levels for some grades to their lowest in five years.

Angola will export 1.77 million barrels per day (bpd) of crude oil in September, up from 1.68 million bpd in August, a provisional shipping list showed on Thursday.

There are still around 25-30 Nigerian cargoes for August loading yet to find buyers, as well as about five Angolan vessels and about 10 cargoes from other West African nations.

One trader said it was the largest backlog of cargoes he had seen in the 10 years he had been trading oil.

“I think there’s a bit more downside to come,” he said.

Indications on differentials for September cargoes from Angolan state oil company Sonangol were lower than initial indications for August, but still far above what traders said they were likely to trade at.

ANGOLA
Indications from Sonangol were as follows:
– CLOV: -$2.50
– Dalia: $-3.00
– Girassol: -$0.20
– Hungo: -$2.50
– Kissanje: $-1.20
– Nemba: -$1.50
– Plutonio: -$1.50
– Saturno: -$5.50
– Saxi: -$0.70

– Girassol: Traders assessed this grade at closer to dated Brent minus $2 a barrel, a level not seen since 2009.

NIGERIA

Traders reported no fresh offers for Nigerian grades on Wednesday. Qua Iboe was last assessed at around a $1 premium to dated Brent.

ASIAN TENDERS
IOC bought a cargo of Qua Iboe and one of Zafiro from Vitol, a trader said.