Unsold oil
Such a large amount of unsold oil is unusual, especially for the current month, given the West African trade cycle is typically closer to two months ahead. Estimates for both countries’ overhang were as high as 40 million barrels earlier this week.
Supplies from the Middle East are displacing medium and heavy West African grades in Asia as lowered official selling prices in January and shorter voyages give those grades a competitive edge, the analysts said.
India’s oil imports from Russia have remained resilient despite tightening Western sanctions, displacing medium-heavy density West African crudes, while light to medium-density West African grades are struggling to compete with supplies from Argentina and Brazil, two traders said.
Nigeria has also been left to market more oil because of reduced imports by Africa’s largest oil refinery, the 650,000 barrels-per-day Dangote plant, which will in January undergo maintenance, Kpler’s Grabenwoger said.