• 1 day PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 1 day Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 1 day Syrian Rebels Relinquish Control Of Major Gas Field
  • 1 day Schlumberger Warns Of Moderating Investment In North America
  • 1 day Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 2 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 2 days Shell Restarts Bonny Light Exports
  • 2 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 2 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 2 days British Utility Companies Brace For Major Reforms
  • 2 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 2 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 3 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 3 days Kinder Morgan Warns About Trans Mountain Delays
  • 3 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 3 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 3 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 4 days Exxon Starts Production At New Refinery In Texas
  • 4 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 4 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 days China To Take 5% Of Rosneft’s Output In New Deal
  • 5 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 5 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 5 days OPEC Oil Deal Compliance Falls To 86%
  • 5 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 5 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 6 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 6 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 6 days Aramco Says No Plans To Shelve IPO
Controversial Azeri Pipeline Receives $500M Funding

Controversial Azeri Pipeline Receives $500M Funding

The European Bank of Reconstruction…

The U.S. Shale Play To Watch In 2018

The U.S. Shale Play To Watch In 2018

The original U.S. shale gas…

More Oil Stored Off South Africa Sold Amid Shrinking Contango

Oil Barrels

Commodity trading group Vitol and France’s oil major Total SA have offered out around 11 million barrels of Nigerian crude oil grades for April, Platts reported on Wednesday, citing market sources, in what looks like traders trying to empty storage as shrinking contango and emerging backwardation make storing crude no longer profitable.

While this may point to traders pushing oil out of storage facilities and starting to clear the oversupply held in storage, it is adding an additional supply of Nigerian crude oil grades for April loading programs.

Nigeria’s Qua Iboe and Escravos grades are the main ones being offered out of Saldanha Bay on the southwestern coast of South Africa. This is creating a glut of Nigerian grades for next month’s loading programs that has resulted in Qua Iboe’s offer price dropping by $0.40 a barrel over the past two weeks, according to Platts’ trading sources.

Earlier this month, Vitol group was said to be offering to ship to Europe 4 million barrels of the Qua Iboe grade that it had been storing in facilities in Saldanha Bay.

The recent flattening of the BFOE Contracts for Difference (CFD) curve—with Platts seeing some parts of the eight-week CFD curve emerging in backwardation in the first half of April—has prompted more traders to try to ship crude oil out of storage, because with backwardation, the nearer-term contracts trade at a premium to contracts further forward in the future.

One trader told Platts, commenting on the incentives to ship crude oil out of storage:

“It has been a big theme this year. Anytime we come close to backwardation people begin to unwind their hedges and move oil out of storage.”

Related: The Oil Market Is At A Major Turning Point

The choice to move oil out of South Africa’s Saldanha Bay—whose estimated storage capacity is 40 million-50 million barrels of oil—is not by chance. Saldanha Bay is located between Europe and Asia, and traders can decide where to send oil depending on the prevailing more profitable spreads between the regional grades, Platts notes.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment
  • Naomi on March 22 2017 said:
    Public oil corporations have a break even oil price between $35 & $45/bbl. The welfare oil states have a break even upwards of $100/bbl. Failure to procreate within their means to provide does not justify $100/bbl oil prices. As market forces push the price toward cost of production the welfare states shall provide less welfare.

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News