LONDON: North Sea Forties differentials fell on Tuesday, under pressure from a growing overhang of crude in the region, despite several French oil refineries restarting operations after nearly three weeks of stoppages.
A spate of attacks on Nigerian oil infrastructure is estimated to have cut as much as half a million barrels per day off the country's output, which in theory, should have supported North Sea differentials.
Upcoming maintenance on the Ekofisk oil field, coupled with a smaller June loading programme should have also prevented Forties diffs from sliding to their lowest since early May.
Traders said close to 6 million barrels, or equivalent to nearly two weeks' worth of daily Forties supply, are believed to be currently stored at sea.
Two VLCCs, the Samail and the Maran Thetis, are still anchored off the British coast holding Forties, having loaded in April, while three Aframaxes, all carrying the same grade, are anchored off Hound Point, having loaded over the last three weeks.
"While the expected further uptick in European crude intake next month means that some upside remains for prompt physical Brent assessments in the near term, the lack of reaction in spreads to the Nigerian outages can be seen as a symptom of the fact that we are at a high point for crude on stock, and it could take a more prolonged absence of Nigerian exports to have an appreciable impact on physical markets," analysts at Vienna-based consultant JBC Energy said in a daily note.
WINDOW SUMMARY
Vitol sold Shell a cargo of Forties for loading June 30-Jul 2, at a discount of 30 cents to dated Brent.
Petroineos bid for a cargo loading June 18-22 at 30 cents below dated Brent.
Vitol offered a cargo of Ekofisk for loading July 1-3 at a premium of 55 cents to the dated price, down from the most recent Reuters assessment of plus 70 cents.
BP offered a cargo of Brent for loading July 5-7 at parity to dated Brent.
This compares with the most Reuters assessment of minus 30 cents.
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