Glencore has bought about five cargoes of September-loading North Sea Forties crude, trade sources said, and has lined up a supertanker that could ship some of it to South Korea.
The North Sea is home to the dated Brent benchmark, which is underpinned by Forties and three other crudes. Arbitraging the Forties on Very Large Crude Carriers (VLCCs), usually to South Korea or China, can support the market.
“We are hearing about a possible vessel to Asia,” a trade source said. Five Forties cargoes, which are of 600,000 barrels each, would be more than enough to fill a supertanker.
A London-based spokesman for Glencore had no immediate comment.
ST Shipping, Glencore’s shipping arm, has fixed a VLCC, the Houston, to sail in September to South Korea from Hound Point terminal in Scotland, where Forties cargoes are loaded, according to shipping data. However, such fixtures do not always translate into an actual shipment.
The arbitrage moves come even as Brent’s premium to Dubai crude has risen, a development that can put the brakes on the flow of North Sea crude to Asia.
The North Sea market is showing unusual signs of strength with the first month Brent futures contract trading at a premium to the second , a sign of tight prompt supply.
Loadings of Forties and the three other crudes that underpin Brent are due to rise in September, but to remain at the second-smallest volume this year.
Source: Reuters (Additional reporting by Dmitry Zhdannikov; Editing by Edmund Blair)