The Dated to Frontline Swap, which measures the relative strength of paper and physical North Sea crude, is increasing on a slightly stronger physical North Sea crude market and a stronger ICE Brent complex, trading sources said Thursday.
The Dated Brent minus the frontline front-month April swap rebounded to a one-month high Wednesday, up 20 cents at 21.5 cents/b. It was last higher March 17, at 50 cents/b, Platts data showed.
The May DFL swap was seen trading at minus 6 cents/b Thursday morning compared with earlier in the week when it was trading at minus 15 cents/b.
Improved sentiment in the physical North Sea market drove the increase, with previously available cheap sweet crudes largely sold out, only a small volume of Libyan crude coming back online so far, and several European refineries expected to return from maintenance shortly.
A boost to the futures structure also helped, with June/July ICE Brent up 10 cents at 40 cents/b by the 16:30 London time close Wednesday.
The DFL swap includes an element of structure, as the frontline swap is further out than the 10-25 days ahead typically reflected in the physical Dated Brent benchmark....MORE
Thursday, April 17, 2014
Oil: "North Sea physical versus paper rebounds to month-high on structure, improved demand"