The Angolan Nemba crude premium to heavier grade Hungo crude has hit a near two year high as the naphtha-rich grade gains support from soaring Nigerian crude values, market sources said Friday.
Platts assessed Nemba Thursday at Dated Brent plus $0.60/barrel and Hungo at Dated Brent minus $2.12/b, resulting in a $2.72/b spread.
It is the widest since April 21, 2011.
"It's just been the Nigerian market, it's very strong," a source said of Nemba's strength.
Naphtha-rich Nemba is the lightest Angolan grade assessed by Platts, and its composite yield is comparable to some Nigerian grades.
Hungo is the second-heaviest Angolan grade assessed by Platts.
Nigerian differentials have been on a sharply bullish run through 2013-to-date on solid demand, with values hovering in recent weeks at near two-year highs. Nemba's upward trajectory has been particularly stark.
Since November 14, when Nemba was assessed at Dated Brent minus $1.455/b, its differential has steadily climbed in the subsequent months, gaining a cumulative $2.05/b through Thursday. During the same period, Hungo's value has varied little.
But bearish pressures are building, sources said, from a combination of weakening refining cracks, and the near-completion of May program buying, leaving a decent overhang.
Naphtha cracks in particular have been exceptionally weak, falling to the lowest level this week since July 2012.
"Margins have collapsed," a source said. "The whole complex is turning down, you can't deny that."
But WAF crude differentials have so far held steady, sources said.
