SOUTH Africa’s Saldanha Bay storage site has flooded the International crude oil market with Nigerian crude oil, according to market sources, adding to the glut of Nigerian crude available in the April program.
Nigerian crudes, Qua Iboe and Escravos, have been offered out of storage, by trading house Vitol and oil major Total. Market sources estimated that around 10 -11 million barrels of stored oil has been offered out.
Additionally, around 15 million barrels of the April program were still available, with the May programs expected to be released later this week.
As a result, trading sources said that due to the overhang, crude differentials started to see pressure, particularly Qua Iboe and Escravos, with the former seeing its offer levels fall 40 cents/b over the course of the past two weeks, reflecting a tougher market for sellers.
There has been a growing incentive for traders to move crude oil out of storage in recent weeks, with a noticeable flattening emerging in the structure of the BFOE Contracts for Difference curve (CFD).