West African grades continued to sell slowly on Tuesday with an overhang of July loading Angolan cargoes while many Nigerian cargoes still lingered, putting pressure on differentials.
Another trader pointed to the strong Brent-Dubai spread which is making WAF uncompetitive.
“The west African market is pretty bad, you have 22 million barrels unplaced and the August programme is about to come out,” one trader said, who pegged the main grade Qua Iboe at just above dated Brent plus $2.00 a barrel on a fob basis.
Refinery margins for the main Mediterranean grade Urals has been negative for the last 15 days, which means less buying by European refiners who mop up the last west African grades.
Some 4-5 cargoes of July loading Angolan crude are still available, with BP, Total and Statoil, a second trader said, despite the emergence of the August schedule.
An overhang of Nigerian grades is also likely with the August programme expected to come out by next week.
Angolan crude oil exports will rise to 1.68 million barrels per day in August, a provisional shipping list showed on Tuesday, their highest for six months as a new grade came on stream.
The 54 cargoes include four 1 million barrel vessels, or around 129,000 bpd from the Total operated CLOV offshore field, the first time these cargoes have come to market.
“This means a lot more heavy crude which is struggling,” the second trader said referring to the new grade.
