North Sea oil output to reach two-year high in October
By Alex Lawler
LONDON (Reuters) - North Sea crude oil output tracked by Reuters will rise to its highest in just over two years in October, according to loading schedules, adding to ample Altantic Basin crude supplies.
This is likely to pressure North Sea price differentials and weigh on Brent crude futures , which are trading below $50 a barrel having fallen towards $42, the lowest in more than six years, last month.
"It does look a bit on the long side," said Olivier Jakob, analyst at Petromatrix, of planned October loadings. "Yes, there is potential for downward pressure on the differentials."
Supply from 12 crude streams will average 2.065 million barrels per day, up from 2.007 million bpd in September, according to Reuters calculations based on loading programmes provided by trade sources.
That is the highest since 2.149 million bpd planned in November 2013, according to Reuters records.
North Sea oil output is in long-term decline as the easier-to-extract reserves are pumped out. Still, investments made in recent years, such as the Golden Eagle project which started up in late 2014, are helping to expand supplies.
The extra oil in October comes as demand in Asia is lacklustre and as refinery maintenance in other regions is looming, limiting crude demand.
"Asian crude demand is weak," said analysts at Energy Aspects in a report, which said the weakness was starting to weigh on West African crude prices and would feed through to the North Sea.
"Global refinery turnarounds will reduce crude demand in the coming weeks."
Some support for differentials could come from a drop in output of the four crudes that set the Brent benchmark - Brent itself, and Forties, Oseberg and Ekofisk - from September's total which is the highest this year.
The Forties programme lists 22 cargoes, one less than in September, although shipments to South Korea, a regular buyer of the crude, could reduce the amount of cargoes looking for buyers in Europe.
To date no October fixtures to Asia have emerged, although at least one Very Large Crude Carrier is expected to make the trip to South Korea in September.
DUC, Troll, Brent, Forties, Ekofisk and Oseberg cargoes are typically of 600,000 barrels, although sometimes several non-standard sizes are included.
Statfjord cargoes can be 800,000 barrels, while Alvheim cargoes are mainly 780,000 barrels.
Loading programmes are usually issued to equity holders between the first and tenth of each month. Reuters attempts to track significant revisions based on actual production levels.
(Editing by William Hardy)
