x

Nigeria’s light sweet grades

For heavy sweet crudes like those from Angola, the sweet crude market turns on its head at limited premiums over light sweet crudes from Nigeria.

This phenomenon has gained momentum in recent months as the oil market is planning to implement a 0.5% sulfur limit for marine fuels as mandated by the International Maritime Organization (IMO) on January 1st.

In order to adhere to these tighter shipping rules, refiners are seeking to buy more heavy / medium sweet crudes, and sweet crudes, especially those from Angola and other parts of West Africa, are seeing a demand boom.

Nigerian crudes are relatively low in sulfur (sweet) and produce a generous amount of diesel, jet fuel and gasoline (clean), which are lucrative commodities for global refineries, and would typically sell at substantial premiums over light crude benchmarks.

On the other hand, Angola produces approximately 1.40 million b / d of medium and heavy but light crude oil, which is low in sulfur but produces a lot of fuel oil and gas oil when refined.

Also, this barrel has emerged as a must-buy crude for those refiners who want to produce marine gas oil because of their very low sulfur fuel oil yields.

This oil has generally traded at a discount to Platts Dated Brent, but in recent times prices for some grades have strengthened due to the supply tightness of such crudes globally.

“Overall medium/heavy sweet is still privileged against lighter grades … usually these are the ones that go first,” said a trader active in the West African crude market.

The trader added that as the diesel market starts to strengthen further ahead of IMO 2020, Nigerian light sweet crude differentials could also start to surge.

Since July, Angola’s Dalia has been at a premium over Nigeria’s Bonny Light as refiners scramble to find heavy sweet barrels.

In 2014 and 2018 Angola’s Dalia was at average discount of $4.58/b and $2.20/b to Bonny Light, according to S&P Global Platts data.

This week Dalia has been trading at a premium of $1.30/b over Platts Dated Brent while Bonny Light has been heard at Dated Brent plus $1.05/b, Platts data showed.

“I think a lot of people expected stronger distillate cracks with IMO and this has not materialized as much as expected,” another WAF crude trader said, adding that that had put some pressure on Nigerian crudes. “Has it been over – hyped or will there be a spike [in diesel]?”

Hot this week

Editors Urge Government To Create Safe, Enabling Environment For Journalists

· Ask security agents to find missing Vanguard journalist As...

EXCLUSIVE: Buhari orders probe of Isa Funtua, AMCON over keystone and Etisalat

Following the controversy generated by the leading opposition party,...

6 Signs your boyfriend thinks you are ugly -Take note of No. 2

They say there are three kinds of people; the...

2023: South-East, Middle Belt Forum Endorses Peter Obi

The South-East and Middle Belt Forum has endorsed the...

MTN Donates 600 Learning Tabs To 12 Schools In FCT

MTN Donates 600 Learning Tabs By Joyce Remi-Babayeju MTN Nigeria...

Julius Berger is delivering lasting solutions to Lagos Traffic congestion‘

Lucy Omakpo Last week, the Project Manager of the ongoing...

Luke Bows Out as Uni-Uyo Alumni Association Elects New President

By Ogenyi Ogenyi, Uyo The University of Uyo Alumni Association...

Wike Praises PDP National Secretary Anyanwu At 60

… Says, "He is a man of integrity" By Joyce...

Court Slams Nigerian Army with ₦50m Fine Over Death of Jos Taxi Driver

By Israel Adamu, Jos A Federal High Court sitting in...

Plateau PDP Crisis: Hon. Clinton Garba Replies Hon. Bagos

...Says Matter Is a Family Affair, Not for Political...

Plateau Set to Host North-Central Public Hearing of Senate Constitution Review Committee

By Israel Adamu, Jos The Plateau State Government has announced...
spot_img

Related Articles

Popular Categories

spot_imgspot_img