Not quite destroys. But Angolan crude has certainly been downgraded.
Platts reports that the country's benchmark Nemba crude is trading at a four-month low. For reasons of chemistry.
The change comes after major Angolan operator Chevron began blending Nemba crude with oil from its Kuito field.
The problem is that Kuito crude is quite different from that of Nemba.
For one, it's more heavy. Kuito's oil rates at 22 API, as opposed to Nemba's 38.6 API.
Then there's sulfur. Kuito is much higher in content, at 0.74% sulfur. Where Nemba is sweeter, at just 0.22%.
Blending the two streams obviously creates a product that's somewhere in the middle. And that's changed the dynamics of Angola's oil market.
Refiners in Taiwan and India are already reportedly shunning the "new Nemba" oil. An understandable reaction, as many of these buyers have facilities that can only handle crude at a narrow range of chemical specs.
The result is that the world may have lost one of its go-to sweet oil blends. Which might increase buying pressure on other high-quality crudes globally.
Particularly the world's main sweet oil blend, Brent.
If buyers do look to Brent as a replacement for Angolan crude, the blend will continue to see gains. Brent has already gained significantly this year against other well-known crudes like West Texas Intermediate (WTI) and even Gulf Coast blends like Louisiana Light.
Keep an eye out to see if Brent continues to surge. If so, it will be good for producers selling into this market.
Here's to quality control,
By. Dave Forest