SPOT ANS CRUDE SALES EXPECTED TO SLACKEN

SPOT ANS CRUDE SALES EXPECTED TO SLACKEN

Following this week's drop in Nymex crude oil prices, industry sources here do not expect further spot sales of Alaska North Slope (ANS) crude for November delivery and say differentials for December are likely to widen.

A source at British Petroleum, the primary ANS supplier, said the company is still nominally offering November cargoes at $2.60 below the New York Mercantile Exchange December light, sweet crude quote, while buyers are asking for discounts of $2.85 to $2.90."Margins are still good - crude is down, but products are steady," he said. Still, he also said ANS differentials are likely to widen through the remainder of 1993.

The Nymex December contract moved up to $17.54 a barrel after dropping earlier in the week.

BP will be coming out with its offer for December delivery later this week, the company source said.

On Monday, BP sold less than a cargo of ANS to EOTT Energy Corp. at $2.75 under the December futures contract.

''If BP is selling at 15 cents below their target this late in the month, they must be squirming," one Los Angeles trader said.

He and others said ANS spot sellers generally receive premium prices when volume is below a full cargo, meaning Monday's terms actually indicate even weaker market conditions.

"The differential is actually a lot wider than $2.75," one trader said. ''We will probably see $3 by December."

Higher North Slope production with the start-up of the Point McIntyre field, opportunities for crude imports and a seasonal decline in demand will help push spot prices lower, some industry sources said.

According to the most recent state government statistics, ANS crude oil production averaged 1.63 million barrels a day in the week ending Oct. 16, compared with 1.58 million b/d a week earlier.

Meanwhile, the spot market for Line 63 crude is said to be firm at around 80 cents under West Coast ANS, compared with a differential of about a $1 in mid-September, trade sources said.

The substitution by one major refiner of California crude for its normal Oriente imports, in November and probably December, is said to be supporting the price.