By Noah Browning
LONDON, June 26 (Reuters) - Outages at North Sea oilfields
have helped put competing Nigerian oil on pace to arrive in
Europe at the highest levels in seven months in June, according
to Refinitiv Eikon data and traders.
Nigeria is set to export about 905,000 barrels per day (bpd)
to the continent this month, the most since a roughly five-year
high of about 1 million bpd in November.
Norwegian and UK offshore fields in the North Sea normally
provide a steady supply of lighter crude to refineries feeding
northern Europe's major economies and are traditionally more
competitive than Nigerian grades due to their proximity.
But planned maintenance on Norway's Ekofisk oilfields this
month slashed exports to just one cargo from the usual 10-15.
Flotta, another of the 12 North Sea fields, closed for repairs
over two weeks in late May. "Nigerian grades are normally middle-distillate-rich and
with Ekofisk having undergone maintenance, Nigeria is meeting
European demand for this type of crude," said Ehsan Ul-Haq, lead
analyst for oil research and forecasts at Refinitiv.
Supply of the five North Sea crude grades that underpin the
dated Brent benchmark is set to fall to around 720,000 bpd in
June, from 948,000 bpd the month before.
The contamination of a pipeline carrying Russian Urals crude
in April interrupted flows to central and eastern Europe for a
month and left stocks in need of replenishment.
Higher volumes to Europe have provided an unexpected boon,
with Nigerian exports to the United States on the wane for a
decade due to increased U.S. shale oil production, and demand
relatively steady in Nigeria's key markets India and Indonesia.
"(Europe) always tends to act as the clearing house at lower
value than the East," one trader selling Nigerian crude said.
Though European gasoline margins have been middling and
especially poor among southern European refiners, several
factors may mesh in coming months to support Nigerian
differentials, which stand near multi-year highs.
Traders said the possibility of a permanent shutdown to the
fire-stricken Philadelphia Energy Solutions
refinery in the city, though it was a consistent importer of
Nigerian crude, would increase demand for gasoline refined in
Europe.
Egina, heavy sweet crude from a new offshore field, has
proved consistently popular among refiners in northwest Europe.
"Exports of the grade primarily go to Europe, specifically
the Netherlands and France, which combined took around 155,000
bpd in May, or 83% of the grade's exports," said Mercedes McKay,
analyst at energy consultancy FGE.
Heavier grades could also benefit, with comparable
Venezuelan and Iranian crude pushed off the market by U.S.
sanctions and ahead of a January switch to less-polluting marine
fuels under new International Maritime Organization standards.
"(Even if) margins are bad, European refiners think they can
profit from distillate demand for the 2020 bunker fuel change,"
Refinitiv's Ul-Haq said.
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Differentials for Nigerian Qua Iboe https://tmsnrt.rs/2FzocVB
Nigerian oil exports to Europe png https://tmsnrt.rs/2ZOLAGq
Norwegian exports to northwest Europe png https://tmsnrt.rs/2ZJUkxj
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