Tuesday 29 September 2015

W. Africa Crude-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, 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.

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