Angola's Dalia and Pazflor crudes slump on weak demand: sources
London (Platts)--17Oct2013/1049 am EDT/1449 GMT
Angolan heavy crude oil Dalia and Pazflor fell to multi-month lows Wednesday after cargoes of both grades struggled to sell in the November loading program, sources said Thursday.
Asian demand for these heavy acidic grades has been very weak, and European and Western demand only emerged after values fell sharply in the last two weeks, sources said.
Dalia was assessed at Dated Brent minus $2.01/barrel on Wednesday, the weakest value for this grade since February 26, Platts data showed. Pazflor was assessed at Dated Brent minus $2.24/b, a fall of $0.23/b from Tuesday and its lowest value since Platts started assessing this grade on August 1.
Article continues below...
Request a free trial of: Oilgram News
Oilgram News brings you fast-breaking global petroleum and gas news on and including:
- Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports
- Supply and demand trends, government actions, exploration and technology
- Daily futures summary
- Weekly API statistics, and much more
Traders attributed the weak differentials to refiners losing interest for the heavy acidic grades while medium heavy grades like Hungo and Kissanje sold much faster for November.
"Weak fuel oil cracks and crudes with a high TAN number are not really needed now," said a trader when asked why Dalia and Pazflor had sold slowly.
Dalia is typically favored by Indian and Chinese refiners, but in the last few months, there has been much less demand from the East. For November, all five stems will be going to either the US or Europe, sources said. Dalia contains the second highest concentration of residual fuel among Angolan grades, following only Kuito. Also hurting Dalia is its high acidic content, sources said. Dalia's acidity of 1.5 mg KOH/gm is among the highest in West Africa, with only Chad's Doba, and Cote d'Ivoire's Baobab higher.
Similarly, Pazflor values continued to tumble in the past month. There is still one stem of this grade unsold out of the November program, and this has put severe pressure on the grade, now that the December loading programs have come out.
In the Platts Market on Close assessment process on Wednesday, BP was offering the only unsold November stem. BP offered 950,000 barrels of Angola's Pazflor at FOB Dated Brent minus $2.40/b for November 4-5 loading. This offer started at Dated Brent minus $2.25/barrel and did not find any buying interest at the close of the window.
Pazflor is a heavy, sweet crude with a current production rate of about 200,000 b/d. Its FPSO, which is operated by Total, is located offshore Angola and is fed by one of the larger fields in Angola.
--Eklavya Gupte, email@example.com
--Edited by Jonathan Loades-Carter, firstname.lastname@example.org