West African Crude Trade Slows Ahead of Christmas

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  • Weak refining margins are cramping European demand for light sweet crude from Nigeria and Angola.

  • Trading economics have improved for long haul West African cargoes to Asia, but Covid-19 cases throw doubt on the sustainability of a recovery.

  • Nigerian National Petroleum Corp. cut official selling prices to clear January overhang, but the impact has been minimal so far.

The West African crude market faces mixed portents ahead of February trade. On the one hand, an uptick in Chinese buying, weaker differentials and favorable long-haul economics buoyed expectations of a recovery in Asian demand. On the other, European demand is flagging, and in China any recovery would appear to be fragile amid rising Covid-19 cases and broader concerns about economic recession.

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