OIL: Caspian Oil Prices Boosted by Libya Outage and Kashagan Works in Oct

An increasingly tight market due the drop in Libya oil production and Kashagan maintenance are boosting prices for Caspian oil grades in the Mediterranean market, according to Reuters sources.

• Caspian supply is considered an alternative to Libya barrels which are of a similar quality.
• The Kazakh CPC Blend discount to dated Brent has narrowed to less than $0.3/bbl compared to as much as a $2/bbl discount earlier this month.
• Several offers of CPC Blend oil cargoes have been suggested a premium to dated Brent although no actual deals have been reported.
• The Azeri BTC premium is rising towards $4.50/bbl from around $2/bbl early this month.
• CPC Blend differentials are also supported by a drop in exports expected during planned maintenance at the Kashagan oil field in October.
• Kashagan works are expected to last over 40 days reducing output by about 400kb/d from Oct. 3 resulting in a drop in Kazakh output to 1.21mb/d in October, according to Energy Intelligence’s calculations.