Demand for Nigerian crude cargoes has picked up significantly after trading stagnated due to the International Energy Agency's release of strategic reserves, sources said Friday.
Nigerian sweet light crude barrels are usually bought by US refiners because of their high yield of gasoline and light end-products. However, with half of the strategic release from the IEA being US barrels, US buyers preferred to take those barrels over Nigerian cargoes.
The market had been subdued for a number of weeks since the announcement on June 23 as sellers were forced to lower their offer levels. This has made Nigerian cargoes attractive again.
"I've never known a Nigerian loading program clear that well and still have a week to go before new loading programs are released," a West African crude trader said. "I think the IEA release killed US buying interest initially and then the differentials were forced lower to a level where they became good for European and Indian refiners," the source added.
Before the release of cargoes, prices for Qua Iboe cargoes were heard at around Dated Brent plus $2.20/b, but trades this week for both Qua Iboe and Bonny Light cargoes have been closer to Dated Brent plus $1.70/b.
"Differentials are certainly lower for these cargoes but they are not disastrous levels," a second trader said.
