A growing overhang of unsold Nigerian crude oil cargoes for March-loading could depress values for the April program, WAF crude traders said.
With the March program in the middle of being loaded at the terminals, pressure is growing on traders to dispose so-called “floating” cargoes which have been loaded before being sold.
“Around 10 million-12 million barrels are currently on the water from the March program,” a European refiner said. “The lack of pricing attractiveness for April cargoes is driving sluggish demand at this stage [of the trading cycle].”
Another trader said there was a light sweet crude supply overhang.
In addition, nearly half of Nigeria’s April program is still available, according to Platts cargo tracking.
With the May loading schedule expected soon, traders said that competition among sellers could soon become still more intense.
Shipping sources said that the volume of Nigerian crude currently sitting in tankers awaiting orders should tighten up the West African Suezmax position list in the coming weeks.
“It might not have an immediate effect on the supply of ships because those ships would have been employed at this time anyway, but if they end up sitting off Nigeria for a long period of time that will have a definite impact,” a shipbroker said.
Others said that the impact of the floating crude had already been felt.
“I know of one charterer that has two VLCCs and two Suezmaxes with cargoes on board that haven’t found buyers yet. It has definitely tightened up the WAF position list,” a broker said.
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