UK liquids production was lower m/m in April by 78 thousand b/d at 1.11 mb/d (-58 thousand b/d y/y), following an upward revision to the March print, as Buzzard production continues to struggle. Output in May is unlikely to have recovered given unplanned outages. Production at Flotta (which is set to have loaded 60 thousand b/d in May) was shut in on 16 May due to unplanned maintenance on a pipe. Operators impacted by the unplanned outage are yet to report when production will return. Even before the outage, May loadings were planned to be lower by 15 thousand b/d m/m due to a reduced Brent-Ninian programme, and BFOET loadings will come in lower given the outages at Oseberg over the month. The June programme will see a normalisation in UK loadings at 0.5 mb/d, though maintenance at Ekofisk will cut BFOET loadings by more than 0.4 mb/d m/m in June, hence the strength in Dated Brent. Production in the coming months is unlikely to recover. As a result, we expect North Sea spreads to remain supported over the summer, with US arrivals insufficient to offset the drop in North Sea production and higher demand from European refiners due to continued disruption from Urals contamination. Field maintenance is set to pick up in Q3 19, with 30 thousand b/d coming out of the Buzzard stream in July, which should boost Forties differentials. Further work at Buzzard, Kraken, Heather-Broom and Scotly-Crathes will weigh on production over the rest of Q3 19. Production should pick up from Q4 19, with 2019 y/y liquids growth forecast at 83 thousand b/d.
UK oil demand increased by 28 thousand b/d y/y in March to 1.43 mb/d, supported by a seasonal surge in jet fuel demand (+12 thousand b/d). Runs were lower by 70 thousand b/d m/m in March at 1.02 mb/d (+85 thousand b/d y/y) and likely slipped further in April due to higher works.