Bloomberg News

BP Fails to Sell Forties Oil; Russia to Cut Novorossiysk Exports

March 29, 2012

BP Plc failed to sell North Sea Forties (EUCSFORT) blend for the third day even after lowering its offer. No bids or offers were made for Russian Urals in the Mediterranean and northwest Europe.

Russia will reduce daily crude exports in April from the Black Sea port of Novorossiysk by 6.3 percent from March, a final loading program obtained by Bloomberg News showed.

North Sea

BP failed to sell a cargo of Forties loading on April 10 to April 12 at a discount of 15 cents a barrel to Dated Brent (EUCRBRDT), compared with yesterday’s offer at a premium of 10 cents, according to a Bloomberg survey of traders and brokers monitoring the Platts trading window.

Trafigura Beheer BV was unable to sell at 30 cents a barrel more than Dated Brent for April 15 to April 17, while Royal Dutch Shell Plc didn’t manage to buy a shipment for April 15 to April 20 at 40 cents less than Dated Brent, the survey showed.

Reported North Sea trading typically occurs during the Platts window, which ends at 4:30 p.m. London time. Before the session, Forties loading in 10 to 25 days was 10 cents a barrel more than Dated Brent, compared with a premium of 9 cents yesterday, according to data compiled by Bloomberg.

Brent for May settlement traded at $123 a barrel on the ICE Futures Europe exchange in London at the close of the window, down from $124.22 yesterday. The June contract was at $122.26, a discount of 74 cents to May.

A halt in production at Total SA fields in the North Sea may further increase the premium on prompt-delivery Brent oil futures, JBC Energy GmbH said.

North Sea supplies are “likely to tighten further,” analysts led by Johannes Benigni, the Vienna-based managing director of JBC, said in an e-mailed report today. There may be “another round of steep backwardation across the Brent complex,” JBC said. Backwardation denotes a market in which nearer-dated oil trades at higher prices than later-dated contracts, potentially indicating concern about supply.

Mediterranean/Urals

Urals (EUCSURNW) was at $3.60 a barrel less than Dated Brent in northwest Europe today, unchanged from the previous session, according to data compiled by Bloomberg. Yesterday, Petraco Oil Co. failed to buy 80,000 metric tons of the blend for April 18 to April 22 delivery to Augusta, Italy, at $2.60 discount.

Russia plans to export 3.24 million tons of crude from Novorossiysk in April, equivalent to 791,640 barrels a day, compared with 845,315 barrels for March, the program showed.

OAO Surgutneftegas sold three 100,000-ton cargoes of Urals via a tender to Vitol Group, Gunvor Group Ltd. and Talmay Trading for loading from the Baltic Sea port of Primorsk, said two traders who participate in the market.

Vitol bought the consignment for loading on April 10 to April 11, while Gunvor for April 12 to April 13 and Talmay for April 13 to April 14, according to the people, who declined to be identified because the information is confidential.

OAO Rosneft sold 100,000 tons of Urals via tender to Glencore International Plc for loading on April 9 to April 10 from the Baltic Sea port of Ust-Luga, said two traders involved in the region’s oil market.

West Africa

Bharat Petroleum Corp. issued a tender to buy crude for loading from May 16 to May 31, according to a document obtained by Bloomberg News. The tender closes on April 3, with offers valid until the following day.

Nigeria’s benchmark Qua Iboe (AFCSQUA1) blend was at a premium of $2.70 a barrel to Dated Brent, down 2 cents from yesterday, according to data compiled by Bloomberg.

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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