Bloomberg News

Shell Fails to Sell Forties Crude; Morgan Stanley Offers Urals

December 20, 2011

Dec. 20 (Bloomberg) -- Royal Dutch Shell Plc failed to sell North Sea Forties crude as the grade’s premium to Dated Brent rose to a two-month high. Morgan Stanley was unable to sell Russian Urals crude in the Mediterranean at a lower price.

North Sea

Shell failed to sell a cargo of Forties for loading from Jan. 7 to Jan. 9 at 70 cents a barrel more than Dated Brent, according to a Bloomberg survey of traders and brokers monitoring the Platts pricing window. Yesterday, Shell sought to buy at a premium of 55 cents without success.

Mercuria Energy Trading SA withdrew its bid for Forties at 55 cents a barrel more than Dated Brent for Jan. 9 to Jan. 12 loading, the survey showed.

Reported North Sea trading typically occurs during the Platts window, which ends at 4:30 p.m. London time. Before today’s session, Forties loading in 10 to 21 days was at 70 cents a barrel more than Dated Brent, the highest since Oct. 7, compared with a premium of 37 cents yesterday, according to data compiled by Bloomberg.

Brent for February settlement traded at $106.67 barrel on the London-based ICE Futures Europe exchange at the close of the window, up from $103.40 yesterday. The March contract was at $105.89 a barrel, 78 cents less than February.

The share of Buzzard crude in the Forties blend rose to 40 percent in the week to Dec. 18, from 36 percent a week earlier, BP Plc said on its website.

Forties production will be 560,000 barrels a day in March, compared with 562,000 in February, 560,000 in January and 557,000 this month, according to BP.

Mediterranean/Urals

Morgan Stanley failed to sell 145,000 metric tons of Urals for Dec. 30 to Jan. 3 delivery to Augusta, Italy, at 15 cents a barrel discount to Dated Brent, compared with an offer yesterday at a premium of 15 cents, the survey showed. No bids or offers were made for the grade in northwest Europe.

Urals was at a premium of 20 cents a barrel to Dated Brent in the Mediterranean, down from 47 cents yesterday, according to data compiled by Bloomberg.

West Africa

Nigeria plans to keep Agbami crude exports in February unchanged at seven cargoes, according to a loading program obtained by Bloomberg News.

The country will also export six consignments of Brass River, four Escravos, two Antan, two EA, two Okono and one Abo, the plan showed. The sizes of shipments range from 90,000 barrels to 975,000 barrels.

Africa’s largest oil producer has sold more than 80 percent of its crude cargoes for loading in January as Indian refiners boosted purchases, according to three traders who participate in the market.

Indian Oil Corp. bought 2 million barrels from Total SA for loading in February via a tender, according to four traders involved in the market.

The company bought one cargo each of Angolan Hungo and Nigerian Akpo blends, said the people, who declined to be identified because they aren’t authorized to speak on the matter. It separately purchased 600,000 barrels of Nigerian crude also for February from another seller, they said.

Chad will export three 950,000-barrel cargoes of Doba crude in February, unchanged from next month, according to a loading program obtained by Bloomberg News.

Qua Iboe was at a premium of $2.22 a barrel to Dated Brent, unchanged from yesterday, data compiled by Bloomberg showed.

--With assistance from Pratish Narayanan in Mumbai and Aiman Rahman in London. Editors: Raj Rajendran, Alessandro Vitelli.

To contact the reporter on this story: Sherry Su in London at lsu23@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net


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