Forties dips to four-week low discount

LONDON: North Sea Forties crude oil differentials came under heavy selling pressure on Tuesday with a deal done below dated Brent at the lowest level for more than a month.

The move came as industry data showed exports from the main North Sea oil production streams were due to hit a 2012 low in July at only just over 2 million barrels per day (bpd).

But very weak European demand has forced oil refiners to cut back sharply on processing, reducing demand for crude.

Europe's refinery utilisation rate dipped to 77.15 percent in May from 79.37 percent in April, figures from industry monitor Euroilstock showed. Refineries usually increase runs in late spring as they return from seasonal maintenance.

This counter-seasonal dip in demand was forcing sellers to discount heavily in order to move cargoes, traders said.

FORTIES

Within the afternoon trading window, Statoil sold a Forties cargo for loading July 1-3 to Shell at dated Brent minus 35 cents, the lowest level reported for more than four weeks, traders said. The deal was a full 50 cents lower than a Statoil offer for an identical cargo on Monday.

Also in the trading window:

BP offered a Forties cargo for loading June 27-29 down to dated minus 25 cents, 30 cents below Monday's offer.

Vitol offered a Forties cargo for July 4-6 at dated minus 5 cents and Trafigura offered a June 24-26 Forties at dated plus 10 cents, unchanged from Monday.

JULY LOADING PROGRAMMES

Exports of 12 key North Sea crude oil streams are set to fall to a 2012 low as output problems slow loadings at the Flotta and Statfjord platforms. Loadings of 12 North Sea crudes will average 2.02 million barrels per day (bpd) in July, shipping schedules seen by Reuters showed on Tuesday.

Full table of key North Sea crude streams:

The four benchmark North Sea crude oil streams are set to pump 890,000 bpd in July, Reuters calculations based on loading programmes show, down from 943,000 bpd in June.

Flotta: Two 650,000-barrel cargoes are expected to loading in July, one new cargo and one delayed from June, traders said on Tuesday.