LONDON: North Sea crude differentials hovered near one-month lows on Tuesday, with buyers slow to emerge despite signs that a prolonged overhang of unsold barrels was starting to clear.
There are close to 10 million barrels of North Sea crude stored on ships in the region. While this is around the highest level since March, it is down from last week's almost two-year high of close to 14 million barrels.
The VLCC Desimi, which has been anchored at Hound Point since May, is heading to the Southwold hub, a ship-to-ship transfer site, along with aframax tankers Hildegaard and Spirit II, according to Reuters shipping data.
A further two aframaxes, the British Kestrel and the Ridgebury Alice M, which had been holding Forties and Ekofisk, respectively, have also discharged in the past few days.
The North Sea physical forward curve has also flipped into backwardation for the first time in around six weeks, showing tighter availability for cargoes loading in a week's time than for those loading in a month.
A week ago, prompt-loading barrels were trading well below those for delivery further ahead.
WINDOW SUMMARY
There were no deals for a third day in a row.
Gunvor bid for a cargo of Brent for loading Aug 15-22 at a discount of 10 cents to the dated price.
Glencore offered a cargo of Brent for loading Aug 15-17 at a premium of 10 cents to the benchmark price.
Litasco bid for a cargo of Forties for loading Aug 18-24 at a discount of 10 cents to dated Brent.
BP bid for a cargo of Forties for loading Aug 13-15 at a discount of 15 cents to dated Brent.
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