LONDON, Feb 3 (Reuters) - China's Unipec, a top buyer, has
halted purchases of West African crude oil despite a sharp drop
in shipping rates as the coronavirus outbreak cuts demand.
* Instead of seeking them for domestic use, Unipec sought to
sell off at least five cargoes of West African oil, mostly from
Angola
* It was offering two cargoes of Gindungo at dated Brent
flat, a Pazflor at plus $1.10, a Sangos at plus 50 cents and a
Saturno at minus 65 cents
* Asia's largest refiner, China's Sinopec Corp, instructed
its plants to cut throughput this month by around 600,000
barrels per day as the rapidly spreading coronavirus hits fuel
demand, sources told Reuters
* The cuts are the steepest in over a decade and come as
independent refiners also reduce runs by 30-50%
* Contagion fears have hit the Chinese aviation sector in
particular with jet fuel cracks hitting their lowest levels in a
decade on Monday at $8.64 per barrel over Dubai crude before
inching up in later trading
* One trader said the world's top crude importer was
increasingly “working from home” as more major airlines halted
flight links and demand for refined products nose-dived
* Freight rates for VLCC tankers eastward plunged to among
their lowest levels since September * Despite those discounts, Europe is set to be the most
likely market for West African heavier oils, though jet fuel
margins in Western markets also plumbed multi-year lows
* So far, European refiners have held off on purchases and
still believe offers will fall further
* “Distillate margins are still low, but as the prices
should drop, (we) probably can compensate, as freight rates are
coming off,” one potential buyer said
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