The Largest Oil & Energy Job Board

North Sea physical crude benchmark Dated Brent at strongest versus paper in four months

North Sea light sweet crude benchmark Dated Brent has risen to a four-month high versus the Brent Frontline swap, tracking continued recovery in North Sea fundamentals as well as in Brent futures time-spreads, traders said.

North Sea light sweet crude benchmark Dated Brent has risen to a four-month high versus the Brent Frontline swap, tracking continued recovery in North Sea fundamentals as well as in Brent futures time-spreads, traders said.

Dated Brent was assessed at a $0.31/barrel discount to the swap on Tuesday, the highest value since June 20, Platts data showed.

"It makes sense with Brent spreads up," said one trader.

Dated to Frontline swaps are typically correlated with inter-month Brent futures spreads because of the element of time structure involved in comparing prompt physical Dated prices with further-out paper.

Meanwhile the strengthening physical market was demonstrated by stronger buying interest from Shell and Total on Tuesday, leaving several North Sea grades at their highest differentials in months.

Medium-sour UK grade Forties rose to Dated Brent plus $0.35/b, while Brent/Ninian Blend rose to Dated Brent plus $0.385/b, both four-months highs.

North Sea fundamentals have recovered this month from the West Africa-led sweet crude glut in the Atlantic Basin in the third quarter, traders said, as European refineries gradually increased run rates to take advantage of the relatively cheap crude available as well as the tighter product markets during US maintenance.

The fourth quarter also typically sees the European crude market supported by refineries returning from seasonal maintenance.

However, the impact on crude prices is probably already priced in, according to some traders.

"There is [refining] capacity still to come back through November," said one trader. "All that crude is bought already, but the impact of products is yet to hit the market."

platts.com
Copyright:
platts.com
Published on:
October 23, 2014
Source url:
http://www.platts.com/latest-news/oil/london/north-sea-physical-crude-benchmark-dated-brent-26911559
Copyright © 2016, OilFinity. All Rights Reserved. Powered by Talenetic Job Board Software