By Paddy Gourlay
Of Dow Jones Newswires
LONDON -(Dow Jones)- Most of Angola's crude oil production in July has been sold after a heavy buying spree by Chinese companies, traders of West African crude told Dow Jones Newswires Thursday.
Two cargoes were left available out of around 55 cargoes with a volume of 53.76 million barrels next month, sources said, which include one cargo of Nemba crude, owned by Italian energy firm ENI, and one cargo of Girasol crude, owned by BP PLC (BP).
"Both these cargoes were still there last night, so I assume they will be gone by today, or taken into the owner's refining system," said one trader.
Chinese oil companies have increased their buying of Angolan crude production in July, with China International United Petroleum & Chemicals Co., or Unipec, taking more than half of the program, sources added.
"We estimate Chinese companies have taken around 34 million barrels this month," a second trader said.
"They usually take between 25 and 30 million."
A combination of factors has helped boost demand for Angolan crude oil, such as improving refining margins, lower freight rates, and the narrowing of the Dubai oil future price to ICE Brent futures.
Angolan crude grades trade as a differential to Dated Brent, and so have become cheaper relatively when compared with buying Asian crude oils which are priced off the Dubai future contract.
Angola also typically produces medium heavy sweet crude oil grades, which produce a heavy cut of distillates and fuel oil, which are in demand currently.
High sulfur fuel oil barges in Rotterdam have fallen into backwardation for the first time this year, which means prices are more expensive for near-term material than later loading dates.
Meanwhile, oil prices have also slumped since the June Angolan program was announced.
The front-month Brent future on the ICE Exchange has lost around 15% of its value since it peaked on at $89.58 a barrel on 3 May. July Brent is currently trading around $75.25 a barrel.
Angola was expected to ship around 1.74 million barrels of crude a day in July compared with 1.76 million in June due to a production problem at the Plutonio field.
By Paddy Gourlay, Dow Jones Newswires, +44 (0)20-7842-9364; patrick.gourlay@dowjones.com
No comments:
Post a Comment