LONDON: North Sea Forties crude differentials held steady on Wednesday, following the previous day's sharp rally that took physical prices to their highest in a month.
The prospect of rising demand from Asia next month, after the booking of four supertankers to take Forties east, helped push the North Sea swaps market into backwardation, where rates for prompt-loading barrels rise above those for delivery further in the future.
Based on the contracts-for-difference (CFD) market, rates for cargoes loading in one week's time are commanding their largest premium to those loading in two weeks' time in four months, an indication of improving near-term demand.
Four VLCCs have been booked to carry Forties to Asia in July. Not all charters result in an actual voyage, but this would be up from June, as just two supertankers have made the trip so far this month, the smallest number so far this year.
The amount of North Sea crude held on tankers has started to fall after hitting its highest in three months late last week. Around 6 million barrels are being held on board ships, down from over 9 million a week ago.
The share of oil from the Buzzard field fell to its lowest last week in eight weeks, at just 30 percent, according to data on Forties Pipeline System operator BP's website, meaning the Forties stream would have contained less sulphur than usual.
So far in 2017, the week in which Buzzard's contribution was highest was the week of March 29 with 39 percent, while the week with the lowest contribution was April 3 with 20 percent.
WINDOW SUMMARY
No deals were concluded in the daily trading window.
Gunvor bid for a cargo of Brent at parity with the dated price for loading July 21-29.
Unipec offered a cargo of Forties for loading via STS at Scapa Flow between July 10-14 at a discount of 10 cents to dated Brent.
Shell bid for a cargo of Forties for loading July 9-15 at a discount of 25 cents to dated Brent.
Gunvor bid for a cargo of Forties for loading July 21-29 at parity with dated Brent.
BP offered a cargo of Ekofisk for loading July 11-13 at a discount of 15 cents to dated Brent.
Statoil withdrew an offer for a cargo of Ekofisk for loading July 12-14 at a premium of 20 cents to dated Brent.
Shell withdrew a bid for a cargo of Oseberg for loading July 18-20 at a premium of 20 cents to dated Brent, the lowest for this grade in almost three months.
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