LONDON: Sellers are proving reluctant to cut Nigerian crude differentials below close to 5-1/2-year lows despite a stubbornly large overhang of cargoes, traders said on Thursday.
About 25 cargoes of Nigerian crude for February loading remain available and trades are concluding only slowly. But with crude prices in contango - a market structure in which future prices are higher than current levels - sellers are also content to wait it out. "When it gets like this, no one wants to show their hand first," one trader said, adding that sellers would have to go below published differentials to make deals.
On Thursday a cargo of Agbami and Brass River sold, though the counterparties and prices were not immediately available.
Sellers of Angolan crude have discounted more aggressively, with Cabinda at a six-year low.
There are only about three to four cargoes of Angolan grades left for February loading. March loadings are due out this week.
Traders of all west African grades are also eyeing possible arbitrage to the United States, which is viable on paper amid a narrowing in the spread between Brent crude and WTI futures.
NIGERIA
Bonny Light was offered at premiums to dated Brent from $1 to $1.30 a barrel, but buyers said bids are far lower and deals likely only close to parity.
Qua Iboe offers were close to those of Bonny, but the bid/offer spread is also wide. On Dec. 30 Qua was assessed at dated Brent plus 35 cents, the lowest since 2005, according to Reuters data.
ANGOLA
Traders said only three to four cargoes of February-loading Angolan cargoes remain available. * Cargoes of Dalia, CLOV and Saturno grades are still on offer, while Cabinda has sold out. Dalia is on offer at dated minus $3.75, though bids are closer to dated minus $4.
ASIAN TENDERS
Indian Oil Corp awarded a tender to buy 3-5 million tonnes of west African crude for March loading to Glencore, Shell and possibly BP. At least one cargo of Agbami is included as part of the award.
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