Oil product flows to West Africa 1.19 mil mt so far in Dec: cFlow

Refined oil product arrivals into West Africa in December so far are 1.19 million mt as of Wednesday, compared with 1.21 million mt in the whole of November, S&P Global Platts trade flow software cFlow showed.

Based on fixtures seen by Platts, of these arrivals, 1.02 million mt were thought to be gasoline, 60,000 mt jet fuel, and 67,000 mt gasoil, and 37,000 mt of ultra-low sulfur diesel.
Gasoline buying interest has sustained from West Africa, particularly from Nigeria, as the country's February general election approaches.

Most of the 1.02 million mt of gasoline is expected to arrive in Lagos, Nigeria supporting comments from the Nigerian National Petroleum Corp, which said that the country currently has around 2.6 billion liters of gasoline stock, enough to cover 52 days of consumption.

The availability of gasoline from Northwest Europe is limited however, with not much selling interest, as the contango in Europe is leading to participants storing product in the Amsterdam-Rotterdam-Antwerp hub.

The West African gasoil market came under pressure from local financing problems.

Traders said that lower crude oil prices meant Nigeria's foreign-exchange earnings were lower, in turn limiting the amount of dollars available for letters of credit.

These are issued by banks as a form of guaranteeing payment of imported products, requiring sufficient amounts of dollars to assure payments for oil products.

"There is no availability of dollars to confirm [and execute] trades. So there is a lot of demand but there aren't the tools to service it," a trader active in the region said Tuesday.

Demand from private companies was also said to be diminishing as margins were shrinking due to ample supply.

"Premiums have started falling [slightly]," a second trader said. "I [also] expect lower demand due to shrinking margins [as the market is oversupplied]," he added.

FOB STS cargoes of 0.3% gasoil offshore Lome were heard pegged at ICE LSGO January plus $20/mt.