North Sea Crude-Forties slips; premium to Urals shrinks

LONDON, July 4 (Reuters) - * Forties crude oil differentials slipped on Monday, after a deal went through at the lowest level in two weeks in a market where many players were already believed to be holding excess oil, trading sources said.

* Gasoline and diesel cracks in northwest Europe have slid in the last week to their lowest level since mid-May, prompting traders to consider the possibility of cuts in refinery runs.

* The dated Brent structure is now showing its steepest contango since late March, at around $2.78 a barrel, up from around $1.30 at the start of June, reflecting the drag of weak demand and more than plentiful supplies.

* Forties differentials (BFO-FOT) are trading at a premium of just $1.50 a barrel to those for close competitor Urals in northwest Europe (BFO-URL-NWE).

* This is the smallest premium since December last year, meaning that Forties can compete more effectively for local buyers now than at the start of the year, when this gap rose to a near-five year high of $4.30.

* After a flurry of fixtures of supertankers to carry North Sea oil to Asia, only two VLCCs made the journey in June, according to Reuters data and shipping sources. This compares with four VLCCs, carrying a total of roughly 8 million barrels, in June last year.

* The VLCC Sara, which loaded at Hound Point in mid-June and was due to sail to South Korea, turned around abruptly last week and returned to the English Channel, where the vessel now sits at anchor off the town of Falmouth. Shipping sources said it was unclear what had prompted the turnaround.

* Shell (LSE: RDSB.L - news) has tentatively booked the suezmax Jag Lok to load Flotta crude oil, with multiple discharge options, including the northwest Europe, the Mediterranean, Singapore and even South Korea.

WINDOW SUMMARY

* Socar sold Shell a cargo of Forties for loading Jul 21-23 at an 80-cent discount to dated Brent.

* Glencore (Xetra: A1JAGV - news) offered a cargo of Forties for loading Jul 20-22 at 75 cents below the dated Brent price.

* Statoil (LSE: 0M2Z.L - news) offered Brent for loading Jul 29-31 at a 10-cent discount to dated Brent.

* Chevron (Euronext: CHTEX.NX - news) withdrew an offer for a cargo of Forties for loading Jul 28-30 at 55 cents below dated Brent. (Reporting by Amanda Cooper; Editing by Greg Mahlich)