Bloomberg News

Shell, BP Offer Forties Oil; CPC Blend Drops to Seven-Year Low

May 29, 2012

Royal Dutch Shell Plc and BP Plc failed to sell North Sea Forties crude even after lowering their offers by 5 cents from yesterday. Trafigura Beheer BV didn’t find buyers for CPC Blend at the lowest differential for more than seven years.

Iraq will reduce its daily exports of Basrah Light crude from the Persian Gulf by 15 percent in the first half of June compared with shipments in the previous two weeks, a loading program obtained by Bloomberg News showed.

North Sea

Shell didn’t manage to sell a Forties cargo for shipment on June 10 to June 12 at parity to Dated Brent, while BP was unable to sell the blend for June 13 to June 15 at 10 cents a barrel more than the benchmark, according to a Bloomberg survey of traders and brokers monitoring the Platts trading window.

Trafigura failed to sell the grade for June 15 to June 17 at 26 cents more than Dated Brent, 6 cents above its offer yesterday, the survey showed.

Reported North Sea crude 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 31 cents yesterday, data compiled by Bloomberg showed.

Brent for July settlement traded at $107.23 a barrel on the ICE Futures Europe exchange in London at the close of the window, down from $107.46 yesterday. The August contract was at $106.81, a discount of 42 cents to July.

A third Forties lot for loading next month was delayed by five days, according to three people with knowledge of the shipping schedule.

The consignment number F0604 will be shipped on June 10 to June 12, said the people, who declined to be identified because the information is confidential. It was originally planned for June 6 to June 8 and was advanced by one day two weeks ago.

Mediterranean/Urals

Vitol failed to sell 80,000 metric tons of Urals for delivery on June 8 to June 12 to Augusta, Italy, at $1.15 a barrel less than Dated Brent, 5 cents lower than its offer yesterday, the survey showed.

Gunvor Group didn’t manage to buy the blend for June 16 to June 20 delivery to Rotterdam at $2.25 a barrel less than Dated Brent, according to the survey.

Urals was at $2.35 a barrel less than Dated Brent, up 5 cents from yesterday, the Bloomberg data showed.

Trafigura failed to sell 85,000 tons of CPC blend for loading on June 11-15 at $2.50 less than Dated Brent, compared with a discount of $2.30 yesterday, according to the survey.

The differential of CPC Blend to Dated Brent crude dropped to a discount of $2.35 to Dated Brent in the Mediterranean yesterday, the lowest since April 6, 2005, according to data from Platts.

“It is very much in line with what’s happening to naphtha- rich, gasoline-rich crudes in the Mediterranean,” Ehsan Ul-Haq, a senior market analyst with KBC Energy Economics in Walton-on- Thames, England, said by phone today. “In Europe, naphtha cracks are the lowest since November while in Asia, naphtha cracks are the lowest in one and a half years,” he said, referring to the spread between naphtha and crude.

Iraq will ship 19 cargoes from the Basrah Oil Terminal, seven less than in the second half of May, according to the plan. Exports will total 32.1 million barrels, or 2.14 million barrels a day, compared with 2.53 million two weeks earlier.

The June program comprises 14 consignments of 2 million barrels each, two 1 million-barrel lots, and two 600,000-barrel and one 900,000-barrel.

OAO Transneft said it probably won’t fill the capacity available for crude shipments from the nation’s Baltic Sea ports next month.

Transneft will give oil companies until June 15 to request additional loadings from three available slots at the port of Ust-Luga and seven positions at Primorsk, Igor Dyomin, a spokesman, said today by telephone. Some of the slots will be filled, he said.

West Africa

Nigerian benchmark Qua Iboe crude was at a premium of $1.79 a barrel to Dated Brent, down from yesterday’s $1.82, Bloomberg data showed.

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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