A slump in demand for cargoes pressured West African crude differentials on Friday, as ample supply, weakening refinery margins in Europe and high shipping costs deterred buyers.
Strong supply from competing North Sea oil, combined with higher costs for shipping, have led to a virtual halt in sales of Angolan crude oil this week after a relatively quick start to sales of November cargoes about three weeks ago.
The West Africa to China shipping index for crude tanker rates reached 84.35 on Friday up from 48.92 at the same time last month, Baltic Exchange data showed.
With about a week before December cargoes come to market, there are still more than a quarter of Angolan cargoes for November export available of the 55 that initially went on sale.
Nigerian cargoes have sold even more slowly with 35 to 40 cargoes still on the market compared with the 63 offered. December vessels will be available in less than two weeks.
Lower refining margins, particularly weaker gasoline cracks, are also set to keep differentials depressed, traders said.
Royal Dutch Shell has asked ship owners exporting its Nigerian oil to sign a “letter of comfort” to guarantee it is not stolen, according to an email from the company seen by Reuters.
