Nigerian light sweet crude Akpo has seen its values fall sharply amid weaker demand because of a drop in refining margins, trading sources said Thursday.
About a month ago at the start of the trading cycle of the Nigerian June loading program, demand for naphtha-rich Akpo from Asian, European and South American refiners was healthy.
But in the last two weeks, demand for this grade has fallen amid a fall in naphtha cracks and declining refining margins.
June Akpo cargoes were being offered at Dated Brent plus $1.70/barrel in early May but by late May the last two Akpo June loading stems were heard traded well under Dated Brent plus $1/b.
Akpo was assessed at Dated Brent plus $0.90/b Wednesday, a fall of $0.30/b since last Thursday. This is also the weakest value for Akpo since April 28, Platts data showed.
On Thursday afternoon, sources pegged Akpo closer to Dated Brent plus $0.80/b.
Sources said the last end-June Akpo cargo was sold at levels close to Dated Brent plus $0.70/b though details of this trade could not confirmed by the participants involved at the time of writing.
But all traders acknowledged the market was looking much weaker than seen recently.
"[It is] a terrible market, under a lot of pressure with margins so poor," said a trader.
Sources said offer levels for the Nigerian July cargoes, however, were also on the high side, with Akpo being offered at Dated Brent plus $1.50/b, while Bonny Light was being offered at Dated Brent plus $3.20/b.
"The market is pretty lethargic, with awful [refining margins]," said another trader.