LONDON: North Sea crude differentials sank on Monday, with Shell offering Forties at its lowest in nearly two months, after the November loading programme showed supply of this stream will hit a six-month high.
Shell offered two cargoes via ship-to-ship transfer at Scapa Flow. Traders say STS offers can often reflect a market where demand is weak and cargoes already on vessels cannot find a home.
Offers for Forties were as low as 75 cents below dated Brent, the weakest since early August, and met with no takers.
The November loading programmes for the four grades of crude that underpin the dated Brent benchmark -- Brent itself, Forties, Oseberg and Ekofisk -- showed supply will rise to about 880,000 barrels per day from around an originally planned 793,000 bpd in October.
Supply of Forties is expected to average 420,000 bpd, compared with a rate of 329,000 bpd in October.
With the end of maintenance on the Buzzard field looming in mid-October, offers for the Forties grade in the second half of the month have sunk with the differential for the stream falling to its lowest level since Aug. 10.
The Buzzard field is one of the main sources for the Forties grade but also makes the stream more sour.
When Buzzard is shut down, the grade becomes lighter and usually more expensive.
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