High freight rates, weak Asian refining margins and a tender by an Indian state refiner kept buyers at bay in the West African market on Wednesday.
Asian gasoline margins have hit their lowest in seven years, against a backdrop of vast supply in the region, making it uneconomical to process the fuel. Slow demand from Chinese refiners that have more than enough oil in storage, along with expensive freight have created a backlog of unsold cargoes.
The Nigerian market has suffered the most from freight rates, which for a VLCC sailing east from West Africa are at the highest in three years. Offers for big grades such as Qua Iboe and Bonny Light have stagnated between $1.65 and $1.75 a barrel above dated Brent, their highest since September.