LONDON: North Sea crude price differentials rose on Thursday helped by strong refining margins, although sellers continued to outnumber buyers and one VLCC is now anchored off Scapa Flow with Forties.
European refining margins remain firm following a rally in products prices this week, with a Rotterdam-based refiner cracking Brent making about $7.91 a barrel.
Light, sweet crudes such as Ekofisk and Oseberg have been bid up on the back of firmer prices in the Mediterranean. "Margins are good, hence the Mediterranean is bid," one trader said. "The Med is very margins driven."
However, traders were unsure whether refiners could absorb much more oil unless they decide to postpone seasonal maintenance to take advantage of the strong margins.
At 22 cargoes for March, the Forties programme looked quite long, another trader said. "And it's hard to see any more Forties heading East after four VLCCs to South Korea."
The fourth of these, the VLCC V.K. Eddie, is currently loading with Forties at Hound Point. Trafigura was said to have booked the vessel to take Forties to South Korea for storage.
However, the third VLCC to load, the Alsace, is now anchored off Scapa Flow, suggesting it has turned into floating storage.
Output from the Buzzard oilfield accounted for 40 percent of the Forties crude stream in the week Jan. 26-Feb. 1, down slightly from a 41 percent contribution in the week Jan. 19-25.
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