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Nigerian crude differentials fall further on release of strategic reserves

https://www.chemnet.com   Jul 07,2011 Platts
The International Energy Agency's release of strategic reserves and the subsequent increase of available crude to buyers, particularly in the US, has seen some Nigerian crude differentials fall to their lowest levels since late last year, Platts data shows Wednesday.

Differentials for Agbami, a light sweet crude which yields a lot of naphtha and gasoil, were assessed at Dated Brent plus $0.36/b, a level last assessed on December 15, 2010.

Qua Iboe differentials were assessed at Dated Brent plus $1.90/b, a level last assessed for that grade on February 2. Qua Iboe differentials have fallen but not as significantly as Agbami differentials because the grade has a wider range of buyers, sources reported.

"Qua Iboe has a lot of different buyers and Bonny Light lifters can take cargoes to their systems when prices drop too far. This will keep their prices relatively strong compared with crudes such as Agbami and Erha which are dependent on one main buyer," the crude trader said.

"There is a steep fall coming for differentials -- some have already fallen off a cliff and others will follow," a second trader said.

Last week BP was heard re-offering two July-loading Qua Iboe cargoes, which were reportedly bound for its Texas City refinery, preferring instead to take some of the Strategic Petroleum Reserve barrels, trader sources said. BP declined to comment.

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