After several months of low patronage, arbitrage opportunities are beginning to open up for Nigerian crude oil to head trans-Atlantic, with a few cargoes said to be heading to United States refineries, trading sources said.
Two Nigerian grades, including at least two cargoes of flagship crude Qua Iboe as well as Bonga, were heading to US east coast refineries as well potentially down to the US Gulf Coast, traders said.
Since last year, US demand for Nigeria’s crude has dropped considerably.
“It is bits and pieces, not massive flows,” one crude trader said.
One cargo of Nigerian crude is heading over regularly to the Delta Airlines refinery in Trainer, Pennsylvania, a source close to the matter said, while Philadelphia Energy Solutions was also heard to have bought Nigerian crude, including an end-September loading cargo of Bonga and, potentially, a cargo of Qua Iboe.
Shipping fixtures seen by Platts showed PES, Exxon and Statoil chartering vessels to take West African barrels to the US for end-September loading cargoes, and traders have said Vitol’s October 3-4 loading Qua Iboe cargo was also heading to the US.
Sources at Statoil and Vitol were not available for comment, while ExxonMobil spokesman Paul Tindall declined to comment.
Traders cited the narrower Brent/WTI spread and good US refining margins as the main factor pulling Nigerian barrels.
“I think Qua works because of the arb and margins,” a crude trader said. “The arb is low enough for [refineries] with good jet margins to buy it.”
While flows of Nigerian crude to the US during June and July were partly driven by high prices for domestic light sweet crudes, such as Louisiana Light Sweets, that has not been the case for the recent moves.