North Sea Crude-Forties Stronger on Expected Tighter June Market

North Sea Forties crude differentials jumped on Tuesday, as traders eyed expectations of a tightening market next month with little sign of a recovery in exports from Libya and field maintenance in Norway.
 

Libya's western El Feel and El Shahara oilfields are still closed, a spokesman for National Corp Oil (NOC) said on Tuesday, more than a week after the government said protests were over.

The Libyan NOC on Monday said production was just 210,000 barrels per day, well below the post-civil war high of around 1.4 million bpd.
 

In Norway, Statoil (STO)'s Snorre B platform remains shut, traders said, after production was first halted on Saturday then again on Monday after detecting a small oil leak.

The Snorre field, which has two platforms, produced 88,000 barrels of oil per day in 2013, and feeds into the Statfjord crude stream.

"Part of the strength in non-Forties North Sea grades is probably due to earlier than usual Norwegian field maintenance, which is more heavily biased towards the second quarter in 2014, instead of the usual third-quarter," London-based consultancy Energy Aspects said in a note.

"Second quarter Norwegian production (is) set to fall by 200,000 bpd quarter-on-quarter."

Traders said weak margins in the region, especially for diesel, have stopped prices from rising further.

But some said that even run cuts by European refineries would be unlikely to push crude prices significantly lower, with the market expected to tighten during the summer and as the security situation in Libya deteriorates.

"Margins are going to suffer next week and refiners will start trimming runs," one trader said.

"And crude is going to continue going higher."

A tighter initial loading programme for competing Urals crude is also supporting prices, traders said.

Additionally, a lack of exports of Iraq's Kirkuk crude, which has been shut for almost two months by militant sabotage of its main export pipeline, is also tightening physical markets in the region and making barrels from the North Sea more attractive, traders said.
 

Forties
* Shell sold Statoil a cargo of Forties for loading May 29-31 at dated Brent minus 5 cents, up from offers around minus 25 cents on Monday.

* Glencore (GLCNF) sold BP a cargo of Forties for loading June 6-8 at dated Brent plus 45 cents. That was up from bids on Monday for loading June 8-12 at dated Brent plus 10 cents.


Ekofisk
* Shell sold Statoil a cargo of Ekofisk for loading June 5-7 at dated Brent plus $1.45, down slightly on previous deals.


Osberg
* Traders said Oseberg was bid between dated Brent plus $1.40 and dated Brent plus $1.65 on Tuesday, but no deals were done.


Database
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(Reporting by David Sheppard; Editing by David Evans)