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After a couple of months of increasing values, Angola's heavy crudes, which had been outperforming lighter barrels, have seen demand falter, allowing the heavy-light spread to widen again.

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"The heavies have to come off now -- the spread has to return to where it was," said a West African crude trader.

The price spread between the two ends of the complex had reached multi-year lows on strong Chinese demand for heavy grades during the past two trading cycles in March and April.

This came as Chinese buyers looked to find alternatives to heavy, sour Middle East crudes whose supply has been limited by OPEC's production cut agreement and with strong fuel margins in the region.



But the heat has dissipated from the market for the heaviest Angolan grades such as Dalia, which has seen spot offers from state-owned company Sonangol drop from an initial offer of Dated Brent plus 10 cents/b to Dated Brent minus 20 cents/b.

Other medium-light grades such as Girassol and Cabinda, have not seen the same pressures, said traders, with both grades grades clearing cargoes at a faster pace than Dalia.

Dalia was assessed Wednesday at a discount of 80 cents/b FOB to the 30-60 day Dated Brent strip, S&P Global Platts data showed.

Girassol, a light grade, was assessed at a discount of 5 cents/b to the 30-60 day Dated Brent strip. The spread is currently at a 70 cents/b discount, but reach its narrowest point during January 26-February 2, when it was at a 20 cent/b spread.

The Dalia-Cabinda spread was seen to be 55 cents/b discount on Wednesday, a 35 cents/b drop from its narrowest point at 20 cents/b during the period February 28-March 6.

Similarly, other heavy-light Angolan grade spreads have also tightened. The discount of heavy grade Hungo -- currently assessed at a discount of 60 cents/b to the 30-60 day Dated Strip -- to Girassol is at 60 cents/b, 30 cents wider than where it was during the period of March 2-March 22.

The one exception to the heavy-light spread story is Nemba, the lightest of Angola's crude oil grades assessed on spot, which has struggled to find buyers in May, according to traders.

--Gillian Carr, gillian.carr@spglobal.com
--Edited by Jeremy Lovell, jeremy.lovell@spglobal.com