Yemisi Izuora/Ijeoma Agudosi
There are indications suggesting a fresh oil demand from Nigeria following dips in freight rates and a rising Mediterranean light sweet crude market.
After being shut out recently because of high freight and weaker prices for light, sweet Mediterranean grades, West African crude particularly Nigerian grades were looking attractive, Reuters quoted un-named market sources.
Qua Iboe, Nigeria’s flagship grade, was assessed at Dated Brent plus $0.35/barrel last week, having been trending downwards in recent months from Dated Brent plus $1.80/b in March.
“Freight is easing, so European refiners are looking at alternatives,” one crude trader said.
That comes as grades such as Azeri Light, which competes with Nigerian crudes, has risen steeply in the past week, having been at a multi-year low late May.
Other light grades in the region have also seen increases, due to a tighter Mediterranean sour crude market.
Crude could come from West African barrels in floating storage, traders said.
“I think that there are already some barrels coming out of storage as the market structure is not so favorable to keep the barrels floating,” a trader said.
Some barrels could also be released from inland storage, traders said.