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Wednesday, 20 April 2016

W. Africa Crude-Closed arbitrage pressures Nigerian differentials

(Reuters) -

* Oil prices rebounded to a 2016 high Wednesday as U.S. stocks of crude posted a smaller-than-expected build and there was a drawdown in gasoline and distillate stocks.

* Russia said on Wednesday it was prepared to push oil production to new historic highs, just days after a global deal to freeze output levels collapsed and Saudi Arabia threatened to flood markets with more crude.

* Iran also said it was determined to recover its share of the world oil market following the lifting of sanctions, and can withstand low prices.

NIGERIA

* Nigeria's June loading programmes were still emerging, with a slight increase in Qua Iboe exports to 317,000 barrels per day (bpd) but one less cargo for each of the Agbami, Escravos and Usan export plans.

* Senegal's SAR bought a cargo of Qua Iboe in its tender, but the grade remained easily accessible.

* The arbitrage to the United States had mostly closed as dated Brent was trading at a larger premium relative to U.S. WTI.



* As a result, the bulk of the some 15 cargoes left for May loading were expected to seek an outlet in Europe.

* Despite an ongoing force majeure on Forcados, and the still-missing Erha export plan for May, Nigerian crude was in ample supply.

* Qua Iboe differentials were under pressure, as several May cargoes are left for sale and there is a slightly longer bpd programme in June.



ANGOLA

* Sonangol had allocated 13 June-loading cargoes to term buyers, including four to Unipec and 7 to Sinochem.

* The allocations left the company with three cargoes to trade, including the June 15-16 and June 23-24 Dalia and the June 14-15 Sangos. It was offering the former at $3 per barrel discounts to dated Brent and the latter at a $1.80 per barrel discount.

* Trading was subdued as the term cargoes were allocated, but sources said they expected Asian buying to remain firm, though likely slower than the 18-month high loadings for China in April.



TENDERS

* Senegal's SAR refinery purchased a cargo of Que Iboe in its tender, which traders said was the May 5-6 loading cargo. The winner was a trading house, though sources said it bought the cargo from Cepsa.

* Indonesia's Pertamina issued a tender to buy oil over the July to December period, including cargoes of Qua Iboe and Escravos.

* Taiwan's CPC was expected to award its tender to buy crude later this week.



* A tender from India's MRPL for June-loading cargoes will close on April 22. India's BPCL has also issued a tender to buy oil for loading in the second half of May. 

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