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Nigeria’s crude oil loading schedule for November may face some setbacks, as about 30 cargoes are awaiting buyers. This is just as crude premiums to benchmark prices have come down by US$1 to US$2 a barrel depending on the grade
Nigeria’s crude oil loading schedule for November may face some setbacks, as about 30 cargoes are awaiting buyers. This is just as crude premiums to benchmark prices have come down by US$1 to US$2 a barrel depending on the grade, traders said. A similar overhang is being reported in Angola’s November schedule too. For West African crude demand to pick up again, premiums need to come down further, traders said. Otherwise, prices for oil products need to rise proportionally, FGE’s Davis said.
Some West African crudes hit multi-month highs in early October. For instance, Nigeria’s Bonga crude was offered at a premium of $9 a barrel to the benchmark dated Brent, while Escravos and Forcados were on offer over $8. However, freight rates have since jumped and refiners’ profit margins have narrowed, weighing on demand.
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The jump in freight costs followed two developments – the Hamas cross-border attack on Israel on October 7 and the United States on October 12, imposing the first sanctions on owners of tankers carrying Russian oil priced above the G7’s US$60 cap. Crude oil prices in some of the world’s main physical markets have weakened due to a jump in freight costs and a drop in refining margins, according to traders and LSEG data, suggesting demand weakness that could filter through to the futures market.
