The quantity of North Sea crude in tankers in the region has dropped this week, with the current structure of the contracts for difference curve providing no incentive for traders to float cargoes.

According to data from cFlow, S&P Global Platts trade flow software, there were 2.6 million barrels of BFOE crude in floating storage Friday, down from 3.6 million barrels on January 9.

The current floating storage stocks comprised about two million barrels of Forties on the VLCC New Success and around 600,000 barrels of Forties on the Ridgebury Alice M.

The New Success was loaded by Vitol on December 10 and the trader has frequently offered cargoes off the ship in the Platts Market on Close assessment process since.

The floating storage operation for this ship could be coming to an end, trading sources said, with Shell said to have bought the crude.

Traders at Shell and Vitol have declined to comment.

With a large quantity of Forties expected to head to Asia in the first half of February, CFDs have been well supported this week. In the brokered market Friday morning, there was a backwardation of three cents/b between January 30-February 3 and February 6-10.

“The first half of February is where the arbitrage [barrels] are concentrated,” a source said.

When there is a strong contango between weeks, traders can use CFDs to pay for the cost of tanker demurrage, but the front of the curve has noticeably flattened since the steep contango seen for much of the fourth quarter of 2016.

Thus far, Glencore and Trafigura have been reported to have taken the VLCCs Alice and Sandra, respectively, for Hound Point loads in the first half of February. Shell has also been linked to a North Sea-Far East voyage on the Apollonas on February 11-15. All parties declined to comment on the fixture reports.

Source: Platts