Forties Crude Rises After Phibro Buys a Cargo, Chevron Bids

By Alexander Kwiatkowski

Aug. 14 (Bloomberg) -- Forties North Sea crude rose to a one-week high relative to Dated Brent after Phibro Ltd. bought a cargo and Chevron Corp. bid without attracting a seller.

Forties was at a discount of 67 cents to Dated Brent compared with a discount of $1.19 yesterday, according to data compiled by Bloomberg. That's the smallest gap since Aug. 5.

The price rose after companies including Chevron and Phibro bid for cargoes. Phibro bid for a shipment loading between Sept. 1 and Sept. 3 before buying a cargo from Royal Dutch Shell Plc loading Aug. 27 to Aug. 29, according to the companies.

Chevron also bid for a cargo and failed to attract a seller. The U.S. refiner bid for a shipment loading Aug. 23-28 at a discount of 60 cents to Dated Brent, it said.

Demand for Forties has risen amid rising prices for alternative crude types such as Russia's Urals blend. European refiners may switch consumption between Forties and Urals when the spread between the two grades narrows. Forties typically trades at a premium to Urals because of differences in the value of the products they yield.

The spread between the cost of Forties and Urals, relative to Dated Brent, narrowed to 41 cents yesterday, the smallest since May 2006. The spread has averaged $3.38 this year. Urals prices rose to the highest in six months yesterday.

Dated Brent for delivery in 10 to 21 days rose to $111.35 a barrel from $110.16, according to Bloomberg data.

To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net