Nigerian crudes slide further on weak demand amid glut of cargoes

Nigerian crudes continued to fall at a steady pace due to thin demand amid a glut of cargoes from both the January and February programs, trading sources said yesterday.

Almost all of the key Nigerian crudes are at multi-year lows, and with the picture looking even more bearish, values were expected to decline further.

Nigeria’s flagship grade, Qua Iboe, was pegged close to Dated Brent plus $0.50/barrel yesterday afternoon. It was assessed at Dated Brent plus $0.51/b Wednesday, the lowest since April 22, 2009, data showed.

The Nigerian market remained oversupplied with approximately 20 million January barrels still available along with almost the entire February program.

Traders said that as a result, crude values were expected to fall, especially with such weak buying interest from Asian and European refiners.

Similarly, the light sweet Agbami was pegged near Dated Brent minus $0.90/b yesterday, and this grade was assessed at Dated Brent minus $0.86/b on Friday, the weakest since November 12, 2012, according to data.

Traders said the January 30-31 Agbami stem had been sold by a trader at Dated Brent minus $0.90/b but details of the buyer could not be immediately confirmed. Traders said Agbami January cargoes were being offered weaker than Dated Brent minus $0.50/b and with both gasoline and naphtha cracks very weak, naphtha-rich light sweet crudes such as Akpo and Agbami were falling sharply.

“Naphtha cracks are terrible, the light [crudes] are suffering,” the trader said. “The ultra-light crudes [like Agbami] are in worse condition. The February program for Agbami hasn’t moved at all.”

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