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Bloomberg: North Sea Brent Crude Premium Falls as Refiners’ Losses Mount

By Grant Smith

July 24 (Bloomberg) — The North Sea dated Brent premium, used to price nearly two-thirds of the world’s oil, declined as profits for European refiners fell to their lowest in 18 months.

So-called dated Brent for loading within 21 days fell to a premium of $1 a barrel over the cost of cargoes loading in September, from $1.40 yesterday, according to data supplied by PVM Oil Associates Ltd. in London. That works out to $76.79 a barrel today, from $78.84 previously, according to Bloomberg calculations based on PVM data.

Refiners running Brent through a plant with a cracking unit may be losing $4.23 a barrel, the biggest loss since Jan. 12, 2006, according to Bloomberg data. Brent futures contracts rose as high as $77.98 a barrel on London’s ICE Futures exchange on July 19, the highest in more than 11 months, squeezing profits for refinery operators.

Exports of the four grades that make up dated Brent are scheduled to decline by 6.8 percent to an average 335,992 barrels a day next month, according to the field operators’ loading programs.

Brent crude for September settlement fell $1.67 cents, or 2.2 percent, to $75.19 a barrel at 5:34 p.m. on the ICE Futures exchange in London.

To contact the reporter on this story: Grant Smith in London at [email protected]

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