West Africa crude: high freight rates weigh on offers
Freight rates for major routes from West Africa to Europe and East Asia have settled near 2019 highs and sellers have offered cargoes for low prices relative to last month in order to drum up interest during the holiday buying period.
Freight rates for supertankers from Angola to China and for suezmaxes from Nigeria to Europe have remained steady for days at nearly $5 and nearly $3 a barrel respectively.
The rates have dissuaded usually more robust Chinese buying of heavier sweet crudes from Congo, Cameroon and Angola in recent weeks, though demand for lower sulphur fuels remains generally high.
Angola’s state oil company Sonangol offered two Dalia cargoes this week for below dated Brent plus $3.00, around 50 cents lower than at this time in the trading cycle last month.
Still, one potential buyer said Sonangol’s asking prices were inflated and didn’t reflect a market weighed down by shipping rates and lacklustre margins.
At just over 842,000 barrels per day (bpd), Angola’s exports to China in December were among the lowest in 2019.
India’s HPCL has issued a buy tender for cargoes loading Feb. 10-20 or for March 10-20 delivery, with bids remaining valid until Dec. 31.
Taiwan’s CPC fulfilled a tender for crude arriving in March with US WTI.