Angola’s Nemba crude hits record high on gasoil demand in Mediterranean, NWE
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Angola’s gasoil- and naphtha-rich Nemba crude, supported by 0.1% gasoil demand in both Northwest Europe and the Mediterranean, has hit its highest value since S&P Global Platts began assessing the grade in July 2009.
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That was despite ongoing lackluster demand for naphtha from the petrochemical sector, sources said.
Nemba was assessed at a $1.60/b premium to Dated Brent Friday, after rising for a one-year low at a 75 cents/b discount to Dated Brent on July 3.
The 0.1% gasoil markets in Northwest Europe and the Mediterranean were “quite strong”, a trader said.
The Mediterranean was particularly firm as a result of a recent tender from Egyptian General Petroleum Corporation and good demand from both Libya and Tunisia at a time when not a huge amount of product was arriving from theUS, a trader said.
The CIF Mediterranean 0.1% gasoil premium to front-month ICE low sulfur gasoil futures averaged $1.61/mt in July, up from minus $3.83/mt in June.
The CIF NWE 0.1% gasoil premium to ICE LSGO futures — which averaged minus $5.20/mt in July, down from minus $4.45/mt in June — rose to a premium of $2.25/mt last Thursday from a discount of $9.50/mt of July 15, before falling $4.00/mt last Friday.
Meanwhile, the weakness in petrochemical demand for naphtha came amid relatively soft gasoline demand, leaving the overall market quiet during the summer period.
“I see all [petrochemical] crackers back online and demand not picking up, support needs to come from other sides of the market,” a second source said.
“Gasoline blending is quiet. I am not really sure why as exports look OK but can’t argue that blenders have been very relaxed for weeks now,” a second naphtha trader said.
In early July, market participants said naphtha-rich grades such as Angola’s Nemba and Nigeria’s Akpo and Agbami were struggling for support amid weak naphtha demand as a result of petrochemical cracker maintenance.
At the time, demand for naphtha was expected to return following petrochemical cracker turnarounds from seasonal maintenance. That demand, and subsequent support for the West African grades, has fallen short as cracker sheld back stock keeping them from the spot market, sources said.
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