Healthy Asian appetite combined with the shorter October loading program for Angolan barrels saw West African medium and heavy sweet crude differentials to Brent at new highs, trading sources said Tuesday.
China's buying was stronger in October compared to September and August, traders said, adding, the increased interest of end-users led to a very fast clearing of the October export program. This has also made other refiners rush to secure their barrels, traders said.
"The [West African] market is very strong...80% of the Angolan program has been placed," said one source.
"Most of the [Angolan] cargoes have already gone...there is good demand in the Far East and Europe. End-users have been buying fast, sustaining high premiums," another trader added.
Trading sources reported China has bought around 22-25 cargoes in October, adding Unipec appeared to be the biggest buyer, that reportedly acquired around 14 stems. However, no trade details were confirmed.
Bullish sentiment continued to pervade the West African crude market despite hopes arising of an end to the Libyan civil war and a resumption of crude oil exports from the North African country, with trading sources not seeing any immediate impact on the sweet crude market.
"Return of Libya's export is not going to happen in a hurry. All depends on how quickly they will return to production and how soon the pipeline infrastructure is fixed, so I do not see the sweet Med market bearish in the near future...it can take months for the government to settle down," one source said.
The fall in Brent crude values meanwhile was cited by trading sources as another factor boosting demand for West African crude and supporting refining margins.
"[The outright] price is lower and this is a relief for refiners," said one end-user.
Traders reported October Dalia crude barrels were trading 0.70-80 cents/b higher compared to last month.
Dalia differentials to Dated Brent were assessed by Platts Monday at Dated Brent minus $2.975/b, the highest level since April 12, when the grade's values also stood at a discount to Brent of $2.975/b.
The October Nemba and Cabinda crude stems had all been placed, trading sources reported, adding some deals were concluded at positive numbers, although this remained unconfirmed.
Cabinda differentials meanwhile rose to the highest level since August 2010, and stood Monday at Dated Brent minus $0.125/b.
Sellers were showing Kissanje barrels at Dated Brent minus $0.50/b, sources reported, adding the grade was initially on offer at minus $0.70/b, but good buying interest allowed sellers seek higher numbers.
According to Platts data, Kissanje was assessed at Dated Brent minus $0.675/b, while Nemba's values were set at minus $0.125/b Monday.
