UK oil major BP has nominated a cargo of Brent crude from the North Sea into the Dated Brent 25-day chains, a source at the company said Tuesday, following a similar move with Oseberg crude on June 15.
Forties crude oil, which like Brent, Oseberg and Ekofisk can be physically delivered against forward contract cash BFOE, or Dated Brent, is normally chosen by traders as a cheaper option.
Forties contains more sulfur and is heavier than Brent, Oseberg and Ekofisk and so usually trades at a discount to these grades.
A trading source at BP confirmed the move Tuesday but declined to comment on the price of Brent blend against Forties.
The cargo, parcel F0705 loading July 21-23, was delivered to trading house Vitol, a source at the company confirmed. The source did not specify whether Vitol would pass it on to another trader.
A cargo of Oseberg loading July 11-13 was put into the chain by BP on June 15 and traders had said a Brent cargo would likely follow.
The nominations come as light, sweet crude prices have tumbled in recent weeks, narrowing the gap between Forties and other North Sea crudes.
Forties was assessed at Dated Brent minus $0.515/barrel Monday, a $0.765/b discount to Brent and $1.01/b discount to Oseberg.
The spread used to be closer to $1.00/b for Brent and $1.25/b for Oseberg in May, data from Platts showed.
"That's not especially bullish...but we still value Brent above Forties," said one trader, adding that BP's decision was surprising.
Forties typically sets the value of the Dated Brent benchmark. BFOE crudes are produced in the UK and Norwegian sectors of the North Sea, a region of the world responsible for about 3% of global crude output.
