As storage fills up, West African crude overhang lingers

A large overhang of April-loading west African crude was depleting slowly on Wednesday owing to some Chinese spot purchases but refiners continued to eschew light grades with high gasoline and jet fuel yields.

Nigerian firms were offering cargoes at official selling price levels while majors and large traders showed higher prices.

*”The only place you can put this stuff is South Africa’s Saldanha Bay but that must be near full,” one trader said.
* Some cargoes were sold this week to a major Chinese refiner but the volume was limited owing to the constantly changing price environment.
* Sales to India could encounter problems beyond run cuts as some ports declare force majeure.
* From Canada and the Caribbean to the Baltic and Singapore, oil tanks around the world are filling fast, despite a 50%-100% jump in lease costs, as oil companies and traders scramble to park unwanted crude and refined products.
* Storage at Cushing in the United States will reach maximum capacity as early as May and Caribbean storage for oil is also nearing capacity, storage brokers said.
* Angola is exporting 45 cargoes in May, up from 39 planned in April. Nigeria’s key grades will also be exporting more in May than in the previous month.
* Sonangol was still offering several spot cargoes: Cabinda at dated Brent plus 50 cents, CLOV at dated Brent plus $1.20, two cargoes of Dalia at dated Brent minus 40 cents and Girassol at dated Brent plus $1.50.
* Japanese trading company Marubeni Corp on Wednesday predicted a record net loss of 190 billion yen ($1.7 billion) for the year ending March due to the economic impact of the coronavirus outbreak.
* The Nigerian Army is preparing to forcibly transfer the sick to hospital and enforce curbs on movement to try to shield the country from coronavirus, and is leasing equipment for “possible mass burial”, according to an army memo seen by Reuters.

Source: Reuters