Differentials fell last week from their highest in nearly two years, when the expiry of the front-month ICE Brent futures contract brought a sharp sell-off of forward spreads, prompting the largest one-day drop in dated Brent since mid June.
The dated Brent forward curve, which had moved to its biggest backwardation since 2014, at nearly $1.50 a barrel last week, is now trading at around 55 cents.
Gunvor was once again offering cargoes of Brent and Forties, but met with no buyers. The trading house has been an active seller of North Sea cargoes for the last month.
Traders said the deterioration in refining margins, particularly for gasoline, which hit six-month lows last week, had partly accounted for the weakness in the physical market.
Even though supply of Forties is expected to decline in October and again in November, diffs for the grade are back at their weakest since August.