West African crude differentials were steady on Friday as traders waited to see if the latest U.S. and European Union sanctions on Russia would spark higher demand for alternative grades.

U.S. President Donald Trump hit Russia’s two biggest oil companies with sanctions this week, prompting global oil prices to rise by over 5% on Thursday.

Sellers in the West African market were not yet posting offers for December-loading cargoes, a trader said, as the market awaited Angola’s term allocations and assessed the extent to which buyers of Russian crude would turn to other grades.

“Let’s see what happens after the dust settles next week,” the trader said.

The Brent forward curve, which had slipped into deep contango at the start of the week on concern of a glut, promptly returned to backwardation and put downward pressure on arbitrage economics for shipments to Asia.

There is still a small overhang of November cargoes needing to be cleared, traders say.
Source: Reuters