LONDON -(Dow Jones)- Severe disruptions are hitting supply of North Sea Forties crude in April, following a serious gas leak on Total SA‘s (TOT) Elgin field last week, traders said Wednesday.
The French oil major was forced to evacuate and shutdown production on Elgin after the leak was discovered, shutting in some 60,000 barrels a day of Forties crude, the main price setting crude for the major physical benchmark, Brent.
Traders in the North Sea market said they were already experiencing disruptions last week, after three cargoes were dropped, but a week later delays continue to mount up.
At least eight additional cargoes of the oil have now been delayed, traders said.
The disruptions helped the price of Forties to soar this week. The latest trade recorded in Tuesday’s public afternoon trading window was at a 40 cent premium to the Brent benchmark, 80 cents above where the crude traded Friday.
“It is bad news for refiners,” said one trader in the North Sea market, adding that even consumers that don’t often buy Forties will be negatively effected because the delays will push up the prices of the physical Brent benchmark.
However, traders added that weak demand in the North Sea could put a cap on gains, at least for now.
According to traders, cargoes 401, 404, 406, 407, 408, 410, 411, 412 and 413 have all been delayed.
–By Sarah Kent, Dow Jones Newswires