Dangote kicks off gasoline production while crude imports hit 6-month low

Executive summary

Atlantic Basin: Nigeria's Dangote refinery significantly reduced its crude imports in August, leading to its feedstock inventory hitting the lowest level since the plant began operations. While the refinery is believed to be struggling with credit issues, it has started processing gasoline and is expected to swap gasoline for crude with NNPC.

Europe and FSU: As 50% of Libyan production volumes remain offline, mainly affecting European refiners, differentials of CPC, BTC and Saharan Blend jumped to multi-month highs. However, prices could come off these elevated levels soon as recent US-led talks between the two political factions are hinting at a potential resolution of the east-west standoff in Libya.

Middle East and Asia: While the two-month delay in OPEC+ unwinding production cuts may provide short-term support, this could be countered by rising exports as domestic demand declines. Medium sour and light sour differentials have strengthened, driven by improving gasoil and naphtha cracks and reduced exports from Russia.