China’s Top Refiner Offers to Re-Sell West African Oil Cargoes

LAGOS (Capital Markets in Africa) – The largest Chinese oil refiner is seeking to offload millions of barrels of West African crude it no longer needs as the coronavirus squeezes the nation’s demand.

Unipec, the in-house trading arm of refining giant Sinopec, is trying to sell at least five cargoes of West African crude that it already owns and would normally have shipped home, according to people familiar with the matter. China’s biggest refiner of crude is lowering the amount it processes because the coronavirus has caused the nation’s demand to plunge by 20%.

Hundreds of millions of people have been told to stay away from work or school in China this week as the country tries to contain a virus that’s killed hundreds, infected thousands, and sharply reduced economic activity. Some cities are in lockdown.

On top of the offers, West African oil is generally selling slowly. About 15 Nigerian cargoes for February and 65 for March remain unsold at the moment, the traders said. That’s a slower pace than normal. For Angola, there are about 20 cargoes still available for next month, according to traders. In busy periods, they would almost all have gone by now.

Monday should have been the first day back to work after holidays for traders and companies in China, with buying picking up as a result. That’s been restricted by the attempts to contain the virus.

Sinopec is in the process of reducing runs at its plants by an average of about 13-15% and will review whether further cuts are needed Feb. 9, according to a person with knowledge of the matter. The nation’s purchases from Latin America have also been sharply reduced.

Source: Bloomberg Business News