Glencore Sells Urals; Libyan Oil Output Boost Aids Med Refiners

Glencore Xstrata Plc sold Russian Urals crude at the lowest level in 11 months. There were no bids or offers for North Sea grades on the Platts pricing window.

The first expansion in Libyan oil production in 10 months is poised to lower regional crude costs, boosting margins for European refiners that have been closing processing sites at the fastest rate in decades.

North Sea

There were no bids or offers for Forties crude, according to a Bloomberg survey of traders and brokers monitoring the Platts pricing window. That compares to a trade yesterday at a five-month high of plus $1.30 to Dated Brent.

Brent for February settlement traded at $107.41 a barrel on the ICE Futures Europe exchange at the close of the window, compared with $106.35 in the previous session. The March contract was at $106.57, a discount of 84 cents to February.

South Korean refiner S-Oil Corp. bought 1 million barrels of Forties from BP Plc, according to a person who participates in the market and asked not to be identified because the information is confidential.

An Aberdeen, Scotland-based spokeswoman for BP declined to comment on the matter. S.J. Kwak, a press official for S-Oil in Seoul, wasn’t available to comment by phone and didn’t respond to an e-mail.

The Royal Dutch Shell Plc-operated Anasuria floating production, storage and offloading vessel is scheduled to shut for eight weeks in the second half of this year “to enable vessel life extension works to be undertaken,” Ithaca Energy Inc. (IAE) said today in an e-mailed statement.

Ithaca holds a 41 percent stake in the Cook field that’s connected to Anasuria. Output at Cook is currently halted because of an unplanned outage linked to the repair of a gas export compressor on the Anasuria FPSO, Ithaca said. Cook is expected to resume production in February.

Anasuria also processes oil and gas from the Guillemot, Teal and Teal South deposits. The fields feeding into the FPSO produced about 110,000 barrels a day from January to September last year, according to data from the Department of Energy and Climate Change.

Urals/Mediterranean

Glencore sold 100,000 metric tons of Urals for Jan. 25 to Jan. 29 to Total SA at $2.30 a barrel less than Dated Brent on a delivered basis to Rotterdam, the survey show. That’s the widest discount since Feb. 25 when the grade traded at minus $2.75.

PKN Orlen SA bought 100,000 tons of Urals for delivery to the Butinge terminal in Lithuania from Vitol Group, according to three people with knowledge of the tender, asking not to be identified because the information is confidential.

China International United Petroleum & Chemical Corp., known as Unipec, is scheduled to load Urals on the supertanker Saiq from Skaw, Denmark for China, according to a person with knowledge of the charter, asking not to be identified because the information is confidential.

The ship is signaling Skaw as its current destination, according to ship-tracking data compiled by Bloomberg today. Saiq was reported as loading in northwest Europe on Jan. 20, according to four tanker reports, including Optima Shipbrokers Ltd. and SSY Futures Ltd.

Lv Dapeng, a Beijing-based spokesman for China Petroleum & Chemical Corp., parent of Unipec, didn’t reply to 4 phone calls and one e-mail between Jan. 9 and today

Libya, the holder of Africa’s largest crude reserves, tripled supply to about 650,000 barrels a day in the three weeks to Jan. 13, according to the government. The production rate, 42 percent of the average for the past decade, is a signal to analysts at KBC Energy Economics and Petromatrix GmbH that competing grades may get cheaper.

A sustained Libyan output recovery may help curb the relative cost of crudes from the Caspian Sea region, Algeria and North Sea. Sharara, Libya’s second-largest field, resumed output on Jan. 4, and the government is negotiating with protesters to keep it open.

West Africa

Ghana’s Jubilee field will produce 100,000 barrels of oil equivalents a day in 2014, the field’s operator, Tullow Oil Plc, said in a statement. This will be unchanged from the average production in 2013.

To contact the reporters on this story: Laura Hurst in London at lhurst3@bloomberg.net; Sherry Su in London at lsu23@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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