BP plans more U.S. crude cargoes for PDVSA even with closed arbitrage

China Aviation Oil (Singapore)

09/05/2016 22:30

HOUSTON/NEW YORK, May 9 (Reuters) - BP  BP.L  has booked at 
least two new tankers to transport U.S. crude in May to a 
terminal operated by Venezuela's state-run oil company PDVSA in 
the Caribbean after sending five cargoes in April, according to 
traders and Thomson Reuters data on Monday. 
    The shipments will carry West Texas Intermediate crude, 
though initially the British oil company had scheduled to 
deliver 2.7 million barrels of Nigerian crude to Curacao to fill 
a Petroleos de Venezuela (PDVSA) tender to import some 8 million 
barrels of oil in the second quarter, the data show. 
     The cargoes will set sail after the U.S. crude export 
arbitrage window was closed over the past week, with U.S. 
futures trading on Monday at its widest premium over Brent since 
the start of the year. 
    U.S. WTI also settled above Brent  WTCLc1-LCOc1  in all 
futures contracts through November on Monday.  
    BP likely hedged the sales in April, traders said, when the 
window was open with Brent's premium over U.S. crude at its 
widest since mid-February. 
    As a result, a number of large oil companies rushed to buy 
calendar-spread options (CSO), betting that tightening supplies 
and resurgent exports would boost the market.  urn:newsml:reuters.com:*:nL2N17U1U9   
    BP has sent at least five 550,000-barrel cargoes of WTI 
crude from the U.S. Gulf Coast to Bullenbay terminal in Curacao 
since March, when it was awarded PDVSA's tender for 5.4 million 
barrels of light oil. 
    A second winner of the same tender, China National Petroleum 
Corp  CNPET.UL  unit China Oil, is supposed to deliver a total 
of 2.7 million barrels more to PDVSA in the second quarter. It 
has shipped two U.S. crude cargoes since April. 
    PDVSA's tender has a provision saying the buyer can choose 
whether to deliver U.S. or Nigerian grades during the specified 
period. The oil is partially being processed at the company's 
refining network and is also being used as diluent for 
Venezuela's extra heavy oil output, according to PDVSA shipping 
data. 
    Nigerian crude available for spot sales is limited. Threats 
from militants led Royal Dutch Shell  RDSa.L  to evacuate 
workers this week at Nigeria's Bonga oil field in the southern 
Niger Delta, following attacks last week that forced Chevron 
 CVX.N  to close an offshore facility, affecting 35,000 barrels 
per day (bpd) of production. 
    PDVSA is facing delays loading and discharging tankers at 
its main crude port due to equipment malfunctions that are 
causing a backlog of vessels in the Caribbean. BP and China Oil 
have only been able to discharge two of seven cargoes sent to 
Curacao since April. 
 
 (Reporting by Marianna Parraga in Houston and Jarrett Renshaw 
and Catherine Ngai in New York; Editing by Terry Wade and 
Richard Chang) 
 ((marianna.parraga@thomsonreuters.com; +1 713 2108510; Reuters 
Messaging: marianna.parraga@thomsonreuters.com)) 
 
Keywords: OIL USA/PDVSA