W'Africa crude falls as China takes fewer cargos

West African crude oil differentials eased further on Friday, depressed by weaker margins in western markets, better supplies for October and slightly less buying by Chinese companies, traders said.

Shipping and trade sources say Chinese buyers have picked up 27-28 West African cargoes for October, down from closer to 32 cargoes in September. Indian buying has also been more muted, although one of the International Oil Companies refiner bought four million barrels of Nigerian and Equatorial Guinean crudes this week.

U.S. demand for West African barrels has been weak this month due to poor refining margins, pressuring differentials.

“Large loading programmes, fewer militant attacks, fewer deferrals, less demand from China - all that adds up to a weaker market,” said a dealer at a bank-owned trading house.

Nigerian attacks

The Movement for the Emancipation of the Niger Delta (MEND), the main militant group in the oil-rich Niger Delta, has said it will end a ceasefire on Tuesday, after a two-month lull in fighting.

Analysts say an amnesty in Nigeria’s oil-producing Niger Delta risks failing, if the government does not back up its offer with serious peace talks and concrete proposals to develop the impoverished region, analysts say.

An unconditional pardon offered by President Umaru Yar’Adua to militants who give up arms by October 4, is the most serious attempt yet to resolve years of unrest, which has prevented Nigeria from pumping more than two thirds of its oil capacity. But its fate hangs in the balance, with three key rebel leaders saying the offer is empty unless demands including a military withdrawal are discussed. The government says the amnesty must be accepted without conditions.

Nigerian crudes

The term Brent crude refers to crude coming out of any of four oilfields in the North Sea – Brent, Forties, Oseberg and Ekofisk, are collectively referred to as BFOE.

* Bonny was reported to be at a discount to Qua Iboe of 5-10 cents, partly due to the higher yield it offers of distillates, which have been very weak this month.

* Ultra light crude Agbami was assessed at close to dated BFOE plus 30 cents with the last deal reported to be Chevron’s sale of its Oct. 23-24 to Petrogal at close to that level. This is sharply lower than last week when offers were said to be at dated plus $ 1.00.

Angola cargoes

Very few Angolan cargoes left, available for Angola now, after the sale of the last cargoes of Nemba and Hungo.

Available cargoes included BP’s Girassol for Oct. 24-25, offered at dated BFOE plus 5-10 cents, traders said, and a Cabinda for Oct. 23-24, around dated BFOE flat.

Hungo was reported talking around dated BFOE minus $1.00.

Asian buying tenders

Indian Oil Corp has bought by tender 5 million barrels of sweet crude for lifting in October and November, traders said on Friday. The state-owned refiner bought one VLCC of Nigerian Escravos from Vitol, and another VLCC containing both Nigerian Yoho crude and Equatorial Guinea Zafiro crude from Glencore. IOC also purchased a million barrels of Yemeni Masila crude from Nexen.

IOC has also issued a new tender to buy sweet crude for November. The tender closes on September 15, with offers to stay valid for two days.

Validity for a regular monthly buying tender by India’s Bharat Petroleum Corp closed on Friday, with the refiner looking to import sweet crude for loading in November. An award was not reported.