LONDON: North Sea Forties crude traded at a three-month low on Friday as refiners tried to offload unwanted barrels ahead of the maintenance season.
"It doesn't seem as if the refineries are running much," one trader said. "The sellers are all refining names." Total, ENI and Phillips 66 all offered cargoes in the Platts price assessment window.
Traders said differentials could weaken further if demand remained so lacklustre. "We are slowly getting closer to trading maintenance barrels, and naphtha has started its seasonal decline due to ethylene cracker maintenance in the East. This normally weighs on the light grades in BFOE," one trader said.
Combined with seasonal Urals weakness, this is likely to give rise to weaker differentials and a weaker structure, he said.
Some support may emerge when US Gulf Coast refiners head into maintenance later this month as this will give their European counterparts some relief, analysts said. US Gulf Coast refiners export large volumes of oil products to Europe.
"We see gasoline cracks recovering into the summer, which should at least help to bring margins up a few dollars per barrel," said Stephen George, chief economist at consultancy KBC Advanced Technologies
Two February Ekofisk cargoes were said to have been deferred into March. One is the Shell cargo that was dropped from February's loading schedule some weeks ago. This will now load on March 14, traders said, rather than Feb. 20.
No details could be obtained on the other potential deferral.
The first Forties cargo loading in March was pushed back to March 15-17 from March 2-4, a trader said. This was also a Shell cargo.
Another potential VLCC shipment to Asia was noted in shipping fixtures, loading March 3 at Hound Point for South Korea. The 270,000 tonne Jiu Hua San was nominated by ST Shipping, Glencore's shipping firm.
The VLCC MT Mistral is currently loading with Forties at Hound Point, ship tracking data showed. The VLCC Artois is at anchor off the coast of Scotland and is expected to load with Forties around Feb. 24. Both will head to South Korea, traders said.
FORTIES:
Statoil bought a Forties cargo loading on March 11-13 from Total at dated Brent minus 30 cents. This is down from Total's last offer for this cargo on Thursday at dated Brent minus 10 cents.
Shell bought a March 12-14 Forties cargo from Mercuria at dated Brent minus 35 cents, a fresh three-month low.
Gunvor bid for Forties loading around March 16-21 at dated Brent minus 40 cents.
Phillips 66 offered its Forties cargo loading on March 8-10 at dated Brent minus 30 cents.
EKOFISK:
Trafigura bought an Ekofisk cargo from ENI loading on March 17-19 at dated Brent plus $1.30.
The quality premium for Ekofisk cargoes loading in March is 43 cents.
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