Nigeria is targeting the export of 1 million barrels of Usan crude by August, reinforcing its crude oil supply to the global market
Nigeria’s Usan crude trade has entered a new phase after recording its first-ever deal in the Platts Market on Close (MOC) assessment process. The milestone came during the June 25 trading session. CNOOC UK offered a one million-barrel cargo of Usan crude for loading between August 18 and 19 from the Usan FPSO.
The cargo first appeared at a $3.05 per barrel discount to Dated Brent. However, global energy trader Vitol later bought it at a $4.50 per barrel discount after showing a lower value. This marks the first successful Usan trade in the Platts MOC.
Interestingly, this was not the first attempt to sell the grade through the platform. ExxonMobil had offered a Usan cargo during the February 20 MOC session. However, the offer was withdrawn before trading closed because no buyer stepped forward.
Meanwhile, another major deal happened on June 25. Sinochem sold a 950,000-barrel cargo of Angola’s Dalia crude to BP at a $7.50 per barrel discount to Dated Brent. These transactions point to growing activity in the West African crude market.
In addition, the Platts West African physical crude MOC recorded a sharp increase in trading interest between June 22 and 25. During the period, traders placed ten offers covering crude grades from Nigeria, Angola and Congo.
The grades included Usan, Escravos, Dalia, Pazflor, Nemba, Cabinda and Djeno. Out of those offers, five cargoes found buyers. Vitol purchased two cargoes, while SOCAR, Glencore and BP secured one cargo each.
Even with the improved trading activity, West African crude still faces pricing pressure. Demand from buyers in the East remains weak. As a result, sellers are offering deeper discounts to attract buyers.
The August trading cycle has already started on a bearish note, with price differentials falling to multi-year lows. Even so, the successful Usan crude trade could improve confidence in Nigerian crude and attract more interest from international buyers in the coming weeks.
