Bloomberg News

Forties Offered at 3-Month Low; Brent Oil Pipeline Still Shut

March 06, 2013

North Sea Forties crude fell to the lowest in more than three months as Mercuria Energy Trading SA offered the grade for a second day without finding a buyer.

The Brent pipeline system remains shut for a fifth day, an official from the operator, Abu Dhabi National Energy Co., known as Taqa, said today from Aberdeen. The company hasn’t yet said when the pipeline will resume, the person said asking not to be identified citing policy.

North Sea

Mercuria offered Forties lot F0316 for loading March 22 to March 24 at a discount of 25 cents a barrel to Dated Brent, a Bloomberg survey of traders and brokers monitoring the Platts pricing window showed. That’s 35 cents less than its price yesterday and is the lowest since Nov. 26, according to data compiled by Bloomberg. Three shipments traded on Feb. 28 at a premium of 20 cents and 25 cents.

Statoil ASA also failed to find a buyer for consignment F0313 for loading March 24 to March 26 at a premium of 10 cents to the benchmark, the survey showed.

Total bid for a March 28 to March 30 cargo at parity to Dated Brent without finding a seller, the survey showed. That’s 5 cents less than its unsuccessful bid yesterday. Chevron Inc. failed to buy a March 28 to March 31 shipment at minus 5 cents while Phibro, a unit of Occidental Petroleum Corp., bid at a discount for 40 cents for March 22 to March 25.

Reported crude trading typically occurs during the Platts window, which ends at 4:30 p.m. London time. Forties loading in 10 to 25 days rose 2 cents to a premium of 7 cents a barrel to Dated Brent, according to data compiled by Bloomberg. Yesterday’s premium was the least since Dec. 31.

Brent for April settlement traded at $110.80 a barrel on the ICE Futures Europe exchange in London at the close of the window, compared with $110.76 in the previous session. The May contract was at $109.92, a discount of 88 cents to April.

Exports of the Aasgard, Grane and Statfjord crudes will be stable in April at seven, four and five cargoes respectively while shipments of Gullfaks will drop by one to six lots, separate loading programs obtained by Bloomberg News showed.

Alvheim shipments will total five cargoes next month, including one consignment from the March plan, according to a separate schedule showed.

Mediterranean/Urals

Vitol Group failed to find a buyer for Russian Urals at $2.30 a barrel less than Dated Brent on a delivered basis to Augusta, Italy, the Platts survey showed. That’s 30 cents higher than its offer yesterday. That compares with a March 1 trade at minus $2.35.

The Urals discount to Dated Brent in the Mediterranean widened by 5 cents to $2.40 a barrel, data compiled by Bloomberg show. In northwest Europe, the discount was at $2.78 a barrel, compared with $2.73 yesterday.

West Africa

Benchmark Nigerian Qua Iboe blend fell 3 cents to $3.37 a barrel more than Dated Brent, Bloomberg data show. The grade climbed to $3.50 on March 3, which was the most since Oct. 12 2011 and were boosted by thefts and force majeure in the West African nation, according to JBC Energy GmbH.

Royal Dutch Shell Plc and other oil companies in Nigeria have this year declared force majeure, a legal provision freeing them of the obligation to honor contracted deliveries because of circumstances beyond their control, four times. Shell announced the latest yesterday, on Bonny Light exports, as thefts threaten to outpace those in 2009, the height of an insurgency by militants in the Niger River Delta.

“Shell’s announcement of force majeure on loadings of Bonny Light due to pipeline shutdowns and theft likely played a key role in pushing prices for the bulk of the region’s barrels up by as much as $1 per barrel in the last several days,” Vienna-based analysts JBC said today in a report.

Hindustan Petroleum Corp Ltd. issued a tender to buy low- sulfur crudes for loading in the first half of April, according to a document obtained by Bloomberg News.

To contact the reporter on this story: Rupert Rowling in London at rrowling@bloomberg.net

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


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