LONDON: North Sea crude oil price differentials rose sharply on Wednesday to reach their highest since late July, in line with a robust rally on the futures market.
Brent crude futures rose by as much as 7 percent to a high of $50.34 a barrel after a US government report showed a steep drawdown in oil inventories, though a rise in storage of oil products eroded some of those gains later in the session, bringing the price below $50.
Vitol sold to Petroineos a cargo of Forties for loading in mid-October at a premium to dated Brent in the Platts trading window, while two other traders bid for Forties to load around the same time but did not conclude any deals.
After a three-week dry spell, this was the second day in a row that Reuters reported deals concluded in the window.
The Gener8 Poseidon supertanker, one of three Glencore booked for September shipment of North Sea crude to Asia, has loaded Forties and has left for South Korea, Reuters shipping data showed.
The VLCC Sara is still at anchor off the French coast and not expected at Hound Point until Sept. 20, while the Houston remains anchored off Rotterdam.
Vitol has tentatively fixed the Maran Thaleia to load at Hound Point in early October, based on Reuters data, while traders have said that a fourth supertanker may be chartered to ship Forties to Asia by the middle of the month.
Differentials have been under pressure for weeks because of an overhang of supply of North Sea crude and shipments in October are expected to hit their highest in two years, which analysts have said could act as a drag on the market.
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