Brent crude contango narrows on oilfield maintenance plans

LONDON, April 6 (Reuters) - The price of Brent crude oil for nearby delivery is being supported by upcoming maintenance that will tighten supply of two North Sea crude grades underpinning the global benchmark, trade sources said on Wednesday.

The discount at which the first-month Brent contract is trading to the second month, a structure known as contango, has narrowed to 14 cents from as much as 96 cents in January, reflecting a perception of tighter supplies.

"Very narrow spreads - maintenance potentially," a North Sea trade source said.

A stronger Brent contango due to ample global supply has encouraged traders to store oil for sale at higher prices later. This is being tested by the move at the front of the Brent curve towards the opposite structure, backwardation.

"Floating storage on Brent-related crude oil is out of the question and even onshore storage starts to be a question mark under the current economics," said Olivier Jakob, analyst at Petromatrix.

Brent is based on four North Sea crudes - Forties, Oseberg and Ekofisk, as well as Brent itself. A drop in supply of these crudes can have a significant impact on prices because of their role in the Brent benchmark.

A maintenance shutdown has long been planned at Norway's Ekofisk field in the summer of 2016 and trade sources say this will be in June. The Ekofisk operator, ConocoPhillips (NYSE: COP - news) , could not immediately be reached on Wednesday for an update on the plans.

Ekofisk is the second-largest of the four BFOE streams, scheduled in loading programmes to pump 300,000 barrels per day (bpd) in April and 252,000 bpd in May.

Supply of the largest stream, Forties, is set to be reduced in July by maintenance at Britain's Buzzard field from July 3 to Aug. 7, trade sources said. The work has not been confirmed by Nexen (KSE: 005720.KS - news) , operator of the Buzzard field.

(Reporting by Alex Lawler; editing by Jason Neely)