* Forties oil stream gains extra cargoes
* Extra supply may weigh on Brent prices, spreads
* Supply still set to drop due to maintenance
By Alex Lawler and Claire Milhench
LONDON, Aug 22 (Reuters) – North Sea oil supply may not be
as tight as initially envisaged after tweaks to August and
September export schedules, boosting supply of crude from the
home of the global Brent oil benchmark.
An expected drop in the number of North Sea cargoes in
September due to oilfield maintenance and natural decline has
supported the price of global benchmark Brent, which hit
a three-month high of $117.03 a barrel on Aug. 16.
But an extra cargo of Forties, usually the most important
crude for setting Brent prices, for September loading appeared
on Tuesday, sold by Royal Dutch Shell. This follows the
bringing forward into August from September of another Shell
cargo last week.
On Wednesday, the premium at which the October futures
contract trades against November was 50 cents,
showing a drop in the price of oil for immediate delivery. The
now-expired September contract peaked at $2.02 above October
when expectations were building of tight supply.
“A cargo was added to the September Forties loading
programme and the front spreads in Brent have a difficult time
to converge to the previous Sep/Oct strength,” said Olivier
Jakob, oil analyst at Petromatrix.
Oil traders were surprised by the appearance of the new
cargo, which they said reflected higher-than-expected production
at Nexen’s Buzzard oilfield before it shuts for
maintenance in early September.
Buzzard, the largest of the dozens of North Sea fields
supplying the Forties pipeline, has a reputation for
undershooting output forecasts after technical glitches lead to
repeated delays to cargoes in 2011.
“The extra cargo was a surprise,” a North Sea trader said.
“It is just that Buzzard is overproducing now – and that is the
big surprise. But the story line still holds, Buzzard will be
out on September 5th.”
AUGUST SUPPLY UP
The extra cargo in August’s Forties schedules means that
exports will average 310,000 barrels per day (bpd), around
20,000 bpd more than previously thought.
With one cargo moved out of and another added in September,
the schedule remains at 200,000 bpd, sharply lower than in
August due to the maintenance work on Buzzard.
Traders said two other North Sea crude streams, Ekofisk and
Gullfaks, may have had an extra cargo each added to their
September export programmes since the initial plans were
released. Further details were not immediately available.
Analysts have increasingly questioned Brent’s credibility as
a benchmark since 2011, given relatively small changes in North
Sea supply can have wide-ranging knock-on effects since Brent is
used to price two-thirds of the world’s oil.
North Sea traders did not expect any more Forties cargoes to
appear for now, but this is a market in which unexpected supply
fluctuations are a part of daily life.
“Normally, it ends up being a surprise,” said one. “The
terminal is scheduling one month in advance so there are bound
to be changes.”
(Editing by Keiron Henderson)
