Bloomberg News

Asia to Boost June Nigerian Oil Imports to 11-Month High

May 18, 2012

Asian refiners will boost their daily imports of Nigerian crude in June to the highest level in at least 11 months, a survey of seven traders and an analysis of loading programs obtained by Bloomberg News showed.

They bought 16 cargoes of Nigerian grades, including eight benchmark Qua Iboe blend, the survey showed. This works out at 513,333 barrels a day, the most since August 2011 when Bloomberg started compiling the data.

Exports to the region totaled 57 cargoes of crude for loading in June from Angola, Nigeria, Republic of Congo, Equatorial Guinea, Gabon and Ghana, two less than May, according to the survey. It amounts to 1.8 million barrels a day, the lowest in six months, compared with 1.81 million this month.

Refiners in Asia can buy Middle Eastern crude or Atlantic Basin grades, and their choice normally depends on the value of the lighter, sweet blends from the North Sea and West Africa versus heavier, sour grades from Saudi Arabia and Iran. Lighter crude yields more lucrative products such as diesel and gasoline. Sweet oil contains less sulfur than sour.

Unlike China, which mostly buys Angolan crude, other Asian buyers, such as Indian refineries, are flexible, and their choices normally depend on the price of individual grades. Most Nigerian blends are lighter than Angola, and normally trade at higher prices.

Nigerian grades “appeared to be better value than Angolan crude due to shifts in price differentials,” James Zhang, a London-based analyst at Standard Bank Plc, said yesterday in an e-mailed response.

Qua Iboe-Cabinda Spread

Nigerian benchmark Qua Iboe fell to an 18-month low of $1.35 a barrel to Dated Brent on April 30, while Angolan Cabinda was trading at an average of $1.51 a barrel more than Dated Brent in April, close to its record high of $1.62 a barrel on March 30, according to data compiled by Bloomberg.

As a result, the spread between Cabinda and Qua Iboe jumped to a record 13-cent premium on April 25, compared with an average of $3.30-discount last year, the Bloomberg data showed.

The U.S., the largest buyer of Nigerian crude, has cut its purchases since September. Its imports from Africa’s largest producer fell to 352,000 barrels a day in February, the least in more than five years, compared with 948,000 a year earlier, according to the data from the Department of Energy.

India bought 18 cargoes for June, one more than this month, according to the survey. The country’s imports of Nigeria crude will rise to 12 cargoes in June from nine this month, while loadings of Angolan grades will fall to two shipments from five.

Largest Refiner

Indian Oil Corp., the nation’s largest refiner, maintained its purchases at seven shipments, while Reliance Industries Ltd. (RIL), which owns the world’s largest refining complex, reduced its imports to five cargoes from seven, the survey showed.

Bharat Petroleum Corp., India’s second-largest state refiner, bought five cargoes of Nigerian crude, the most in at least 11 months, including three shipments of Qua Iboe.

Chinese refiners cut their imports to 29 cargoes, the least in six months, compared with 35 for May, the survey showed. China International United Petroleum & Chemical Corp., known as Unipec, bought 21 shipments, down from 24 for this month.

Indonesia’s state-owned PT Pertamina kept its imports unchanged at three cargoes, including two Qua Iboe lots, according to the survey.

The Brent-Dubai exchange for swaps, which measures the European benchmark against the Persian Gulf grade, averaged $3.77 in April, compared with $3.81 in March and $3.35 in February, according to data from PVM Oil Associates Ltd. The spread fell to a 14-month low of $2.32 a barrel on Jan. 16. Traders make more profit from shipping West African crude to Asia when the spread between the two contracts shrinks.

Nigeria will export 2.27 million barrels a day of crude next month while Angola will ship 1.66 million barrels, Bloomberg calculations based on loading programs showed.

The following tables show details of planned Asian imports. Most cargoes are for 950,000 to 1 million barrels. All the volumes are in barrels a day.

---------------------------------------------------------------
Countries   Number of Cargoes     Total Volume
            June      May         June        May
China       29        35          922,667   1,077,065
India       18        17          566,667     525,484
Taiwan       5         3          158,333      93,548
Indonesia    3         3           95,000      93,548
Japan        1         1           26,667      20,968
Thailand     1         0           31,667           0
---------------------------------------------------------------

Month            Cargoes   Total       Angola        Nigeria
2012
June               57      1,801,000   1,020,667     513,333
May                59      1,810,613   1,147,581     370,774
April              60      1,878,167   1,214,167     424,000
March              61      1,837,258   1,081,452     401,613
February           66      2,151,034   1,357,586     496,552
January            61      1,826,935   1,056,613     461,290

2011
December           47      1,433,387     993,710     279,032
November           49      1,554,500   1,028,500     285,000
October            49      1,507,742     962,581     308,065
September          42      1,344,333     930,167     287,500
August             50      1,536,613     931,774     387,097
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To contact the reporter on this story: Sherry Su in London at lsu23@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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