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W. Africa Crude-Contango market, China virus upends trading

Published 05/02/2020, 17:45
Updated 05/02/2020, 17:55
© Reuters.  W. Africa Crude-Contango market, China virus upends trading

LONDON, Feb 5 (Reuters) - Rapidly slowing economic activity

in China halted Chinese crude buying as Brent crude futures

flipped into contango for the first time since July.

ANGOLA

* Amid sharp refinery runs cuts, Chinese buying was largely

paused but major customers appear not to have issued any force

majeure declarations on existing crude purchases. * Teapot refineries in China's Shandong province, accounting

for a fifth of crude imports, have halted spot trading.

* Only three VLCC tankers were reported in the last 12 days

to be on schedule to export West African crude to China,

chartered by Chevron, Unipec and PetroIneos -- an unusually low

number.

* A collapse in jet fuel margins due to restricted air

travel to and within China has cut demand for heavier crude oil.

* Angolan state oil company Sonangol has been offering a

cargo of Dalia crude at dated Brent plus $2.00, far above a sale

price for the variety of just $1.10 last week.

* India's IOC issued a spot tender with results expected for

crude loading April 1-10, yet results did not emerge.

* The flip of market structure in contango will encourage

traders to keep crude in storage for more profitable resale in

the future, and is a boon for sales of West African oil on long

voyages.

NIGERIA

* Saudi Arabia lowered its official selling prices for its

Arab Light and North Sea forties differentials slipped for the

fourth day in a row, putting downward pressure on Nigerian oil.

* European buyers were largely waiting for price drops as

gasoline cracks eased, though new data on Wednesday indicated

U.S. gasoline stocks fell despite predictions of a significant

build. EIA/S

* Tullow Oil plans to cut a third of its staff to save about

$20 million, a source with direct knowledge of the matter said,

after the firm was hit by weak output in Ghana, delays in East

Africa and lower-than-hoped-for oil quality in Guyana.

* A Milan court has rejected a prosecution request to hear

testimony from a former legal adviser of Eni who has accused the

company of spying on judges, offering a boost to the Italian oil

firm as it fights bribery allegations over a Nigerian oil field.

* Trading companies Mercuria, Trafigura and United Arab

Emirates-based GP Global have applied for licences to supply

marine fuel to ships in Singapore, the world's top bunkering

hub, three sources with knowledge of the matter said.

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