July 2, 2020 / 4:11 PM / a month ago

W. Africa Crude-Angolan differentials steady despite slow Chinese buying

LONDON, July 2 (Reuters) - Port congestion and abundant stocks have dampened Chinese buying, but Angolan price differentials remain steady as refiners switch towards sweeter crude grades amid scarcity and high prices for sour alternatives.

* Chinese state and independent refiners continue to hold off on buying as the backlog lingers, traders said.

* Chinese ports are struggling to unload record volumes of crude with storage tanks full after the country rushed to buy extra barrels during April’s oil price crash.

* Angolan price offers stayed steady as buying interest from Europe perked up, compensating for the unusually low demand in the Far East.

* Angola is resisting pressure by OPEC’s de-facto leader Saudi Arabia for a steeper oil output cut to comply fully with record supply curbs, OPEC and industry sources said.

* With more cars taking to the roads as coronavirus lockdowns ease, demand for lighter, sweeter oil more suitable for refining into gasoline is ticking up.

* Gasoline stocks in northwest Europe fell by almost 9% in the week to Thursday in the third consecutive weekly drop.

* Still, prices of Mediterranean and West African lighter crude grades have yet to firm up amid a global glut of cheaper U.S. crude.

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* The collapse in oil demand from the COVID-19 pandemic is hastening the reckoning for those refiners already struggling as new capacity overtakes demand, posing an existential threat to many, particularly Europe’s ageing plants.

* Future oil product demand growth will never return to pre-coronavirus levels, Citi Research said, adding oil prices were likely to fluctuate between $45 and $60 a barrel in the long term. ))))

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