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North Sea Crude-Forties steady, deferrals mount
July 17, 2013 / 3:57 PM / 4 years ago

North Sea Crude-Forties steady, deferrals mount

* Differentials not expected to go much higher
    * Third August Forties cargo deferred
    * Weaker refining margins unlikely to trigger run cuts

    LONDON, July 17 (Reuters) - North Sea Forties crude
differentials were unchanged on Wednesday as there were no bids
or offers in the price assessment window, and traders said they
saw little scope for them to push higher.
    Another August Forties cargo was deferred, taking the total
to three. Suncor's F0803 parcel, originally scheduled to load on
Aug. 12-14, was pushed back to Aug. 13-15, trade sources said. 
    The new loading dates for Shell's F0801 parcel were finally
confirmed as Aug. 11-13. The cargo was taken off its original
dates of Aug. 7-9 last Friday and new dates were slow to emerge.
    Traders are unsure why there have been so many deferrals
already for August, with Britain's Buzzard oilfield now thought
to be back at its maximum operating capacity. One trader
suggested it could be a capacity restriction on the Forties
pipeline but operator BP said this was not the case.
    Others said the deferrals could simply be related to the
approach of pipeline and field maintenance in early August.
"Maybe it is preparation - like clockwork, it always seems to
happen around this time of year," one trader said. 
    The deferrals and worries about tight August supply are
helping to underpin North Sea crude differentials, but traders
are sceptical prices will go much higher, despite continuing
strength in Russian Urals, a competing crude.
    The last Forties trade came on July 10 at dated Brent plus
50 cents, but Forties was bid up to dated Brent plus 70 cents
this week. 
    "It feels like differentials are high - they may stay here,
but I doubt they will go higher. Probably they will drift off a
little," one said. 
    "Differentials are looking a bit toppish," another said.
    On the demand side, refinery margins have weakened since
June, but traders do not think there will be a significant
decrease in runs as summer demand is coming through and gasoline
cracks are up at nearly $16 a barrel. 
    * Click on for the latest contracts-for-differences.

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