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Sunday, October 23, 2016

North Sea Crude-Forties Firms on Buzzard Supply Cut

April 25, 2014

North Sea Forties crude differentials rose on Friday, supported by the ongoing supply cut from Nexen's Buzzard field, which has delayed loading of a number of April and May cargos.

Nexen said this week that output from the Buzzard oilfield had been cut due to five days of planned maintenance and construction work.

The production dip has triggered a raft of loading delays, including two cross-month deferrals of cargoes.

Production from the Huntington field, also in the U.K. North Sea, has been stopped since April 12 because of work on its floating production and storage unit. A full restart is expected between April 30 and May 7.

The return of supplies from Libya has also been slow to emerge, despite a deal between Tripoli and rebels in the country's east earlier this month.

Despite this tighter supply picture, traders said the lack of arbitrage fixtures to Asia was likely to keep a lid on Forties differentials in coming weeks.

The VLCC BW Utah is still anchored offshore Hound Point but no fixtures have been sighted for the vessel. Jetty 1 will soon close for two months' maintenance, meaning VLCCs will not be able to load.

In the Platts price assessment window, Trafigura sold Statoil (STO) a cargo of Forties for loading May 13-15 at dated Brent plus 35 cents, traders said.

That was up from Statoil's bid of dated Brent plus 5 cents on Thursday for slightly earlier loading dates, which attracted no offers.

The last trade before that was on Wednesday at parity to dated Brent for May 8-10 loading.

(Reporting by David Sheppard, editing by David Evans)

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