June 30, 2020 / 4:12 PM / a month ago

W. Africa Crude-Margins start to favour lighter grades

LONDON, June 30 (Reuters) - Slow but steady draws to stocks of crude and refined products in several key markets plus a general uptick in road traffic is paving the way for the recovery of lighter oil grades, but U.S. competition remains stiff.

* Russia’s share of Europe oil market under threat as exports hit 20-year lows, as buyers shun high-priced sour oil and turn in large part to lighter sweeter U.S. oil.

* Light oil flows from the United States to Europe were close to 3 million tonnes in both May and June, just 1 million tonnes lower than a record high in March.

* Margins were not yet conducive for lighter Nigerian grades to be widely sought in Europe at current prices, traders said, but certain medium grades were benefiting from the shift.

* Bonny Light and Qua Iboe crude were being offered at around dated Brent plus $1.

* Demand for heavier West African grades picked up in Asia as middle distillate margins like gasoil showed signs of recovery.

RELATED NEWS

* OPEC oil output hit the lowest in two decades in June as Saudi Arabia and other Gulf Arab members made larger cuts, a Reuters survey found, pushing group compliance in a supply reduction pact above 100% despite incomplete adherence by Iraq and Nigeria.

* OPEC and Russia will likely ease record oil production cuts from August as global oil demand recovers and prices have bounced back from their lows, four OPEC+ sources told Reuters.

Reporting by Noah Browning; editing by Jonathan Oatis

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