High Shipping Costs Deter Buyers of W. Africa Crude
Nigerian crude oil differentials held at two-year lows on Monday as demand remained subdued, partly due to high shipping costs from West Africa to Europe.
Nearly half of the loading program for August, which originally had 65 cargos, was unsold on Monday. But traders said that demand might pick up temporarily later this week as traders placed cargoes for India Oil Company's import tender.
High freight rates aboard suezmaxes to Europe are deterring shipments to refineries there, traders said.
Rising exports of similar oil grades from Libya has also hurt demand. Libyan oil output has risen to 470,000 barrels per day (bpd) as the El Sharara oilfield ramps up, the state-run National Oil Corp (NOC) said on Sunday.
The premium of Qua Iboe grade crude oil cargoes was assessed unchanged at around dated Brent plus $1 a barrel, compared with Friday.
The United States used to be the top importer of West African crude but imports have fallen due to the rise of U.S. shale production. Differentials of West African crude oil have dived over the past month because Asian demand has failed to pick up the slack.
West African crude oil exports are set to fall to 1.68 million bpd in July from 1.93 million bpd in June, a Reuters survey found.
Qua Iboe and Bonny Light were assessed dated Brent plus $1-$1.50 a barrel although there were no fresh trades on Monday.
IOC issued a tender for September-loading cargoes with part one on Tuesday, part two on Wednesday and the results on Thursday.
(Reporting by Emma Farge; Editing by Pravin Char)