India Takes Nigerian Oil Despite Shipping Concerns

India's HPCL awarded another tender to buy with Nigerian crude oil despite its concerns about shipping from the West African nation.

 

The refiner awarded a tender to buy November loading oil to Chevron (CVX), traders said, likely with Usan crude oil and either Agbami or Brass.

 

On Monday, HPCL said it had not yet been able to fix a vessel to load Nigeria's Qua Iboe crude oil for October loading, and warned it would carefully weigh any future purchases.

 

Indian refiners have proved particularly enthusiastic buyers of West Africa crude this week, both via tenders and some spot purchases.

 

"It's to do with good margins," one trader said, adding the country could also be adding to its strategic reserves. "But the letter of comfort is putting up a certain barrier."

 

While the letter of comfort issue had put off some buyers, others said they were able to get around it with watered down language that vessel owners and their insurers were comfortable with signing. But the issue has impacted freight rates.

 

Sources said spot buying from China had returned after a particularly quiet few months. Trader Unipec has purchased cargoes of Angolan crude oil on the spot market, according to market source.

 

Other spot buying was limited as tenders from India's IOC and Indonesia's Pertamina were still pending.

 

 

* China had returned to the spot market, taking some Angolan cargoes, traders said. Further details were not available.

 

* Roughly 25 cargoes from the November loading programme were still for sale from a total of 55 planned for the month.

 

 

* October loading cargoes were mostly sold, traders said.

 

* Strong buying in Europe and Latin America had helped clear the programme, but with rising Suezmax freight rates traders said differentials would have to fall to keep buyers interested.

 

 

* Indian refiner HPCL awarded its tender to buy oil to Chevron, traders said. The grades were not confirmed, but traders said it included Usan and either Agbami or Brass.

 

* Argentina's Enarsa has issued a tender to buy West African crude, though it does not close this week.

 

* A tender from Indonesia's Pertamina and India's IOC are also due this week.