Sudan Sells Nile Blend at Record Discount
Sudan’s state oil company Sudapet has sold 1.2 million barrels of heavy sweet Nile Blend crude at a record $6.50 discount per barrel to Minas Indonesia Crude Price (ICP) as Minas prices have surged higher, traders said on Thursday.
Sudapet awarded the tender, for two 600,000-barrel cargoes, to two European traders, traders added.
The tender award had yet to be confirmed.
It follows a previous sale at an already deep $6.00 discount for a prompt May-loading cargo earlier this month.
Minas prices have again surged above Brent prices this month, as the grade has been aggressively bid up.
Minas, the benchmark for heavy sweet crudes sold in Asia, such as Nile Blend, normally trades below light sweet Brent crude, except at times of acute power shortages in Japan.
The higher Minas quotes this month would prompt buyers to ask for weaker differentials, and lead to deeper discounts for Sudanese Nile Blend crude, but also lower premiums for Vietnamese grades and for Minas crude itself.
India’s Oil and Natural Gas Corp stopped selling Nile Blend crude on a Minas basis and started using dated Brent as a benchmark from January onwards to avoid Minas’ volatility.
The previous record deep discount was in September 2006 for an October cargo that traded at a $6.00-$6.20 discount to Minas ICP and came amid low demand for the grade and high Minas prices, too.
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