W. Africa Crude-West African diffs steady amid strong demand

LONDON, May 9 (Reuters) – Offer prices for West African grades remained high but have not ramped up significantly despite tightened U.S. sanctions on Iranian oil, which will leave top buyers India and China looking for replacement barrels.

ANGOLA

* Only a handful of cargoes remained for June loading, with the July programme awaited next week.

* Angola’s president sacked Carlos Saturnino as chair of Sonangol amid a sharp domestic fuel shortage.

* The move is unlikely to result in Angola absorbing more crude cargoes because the country has limited refining capacity and imports 80 percent of its refined products.

* U.S. sanctions on Iran as well as Russian outages look set to create gaps in the market but top exporter Saudi Arabia is reluctant to pump more in fear of a potential price crash.

NIGERIA

* Shell confirmed that force majeure remains in place on exports of Bonny Light after the Nembe Creek Trunkline was closed because of a leak on Monday — its second outage in a week and third this year.

* Nigeria is well placed to benefit from the looming exit of Iranian crude from global markets, though major buyer India will probably need to replace only 100,000 barrels per day (bpd).

* Qua Iboe was still being offered at a relatively high price of dated Brent plus $2.50 for June, driven up by the Asian need to replace Iranian crude and last week’s unexpected drop in U.S. crude oil and gasoline stockpiles.

* The shortage is expected to boost lighter West African grades ahead of the summer driving season.

* A VLCC chartered by Marathon was carrying Nigerian Bonga to the United States, Glencore was loading a Suezmax of Pennington Light bound for America and an Aframax of Cameroonian Lokele is en route to Pascagoula pn the Gulf Coast.

* European buyers also were heard to be showing strong interest in Nigerian oil, given the relatively high gasoline cracks and an unusually low North Sea export programme because of maintenance.

TENDERS

* India’s IOC has issued a tender for crude loading June 4-30 and July 1-10. The tender is set to close on Thursday.

RELATED NEWS

* China’s monthly crude oil imports jumped to a record in April. Though a pullback is likely in May, the broader question is how the world’s biggest importer will fare without supplies from Iran?

* The European Union will defend the Iran nuclear accord despite Tehran’s decision to backtrack on its commitments in response to U.S. sanctions, diplomats believe, but European powers expect it to collapse without a deal to sell Iranian oil to China or India.

Reporting by Noah Browning
Editing by David Goodman

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