Fifth VLCC booked for Forties arbitrage to the Far East in February


The fifth VLCC to be booked to take Forties crude to the Far East in February has been taken by Glencore, shipping and trading sources have said.

Glencore was heard to have put the the Phoenix Vigor at a $4.9 million lump sum for a Hound Point-South Korea voyage loading February 25-28. Glencore declined to comment on the fixture.

According to Platts trade flow software cFlow the vessel is currently steaming North on the Atlantic Coast of Portugal with a captain’s destination of Antifer in France.

This followed the Aquila, Alice, Sandra, Bunga Kasturi Lima VLCCs which were previously fixed by Glencore, Trafigura and Shell for Forties shipments to the East in February. The Alice and Bunga Kasturi Lima are expected to load at Hound Point, while the Sandra is currently at the ship-to-ship transfer area of Southwold, ready to perform an STS with the New Success, which had been storing Forties for Vitol.

For March, Trafigura was earlier heard to have fixed the Trikwong Venture for a Hound Point-South Korea voyage on March 1-5. Trafigura did not respond to a request for comment.

A narrow Brent-Dubai Exchange of Futures for Swaps (EFS) has been supportive of arbitrage economics from Europe to Asia so far this year.

The front-month EFS averaged $1.60/barrel on a year-to-date basis, down from $2.29/b in the fourth quarter of 2016 and about 52% lower than the same period last year.

Asian crude markets have been buoyed by reports that OPEC members are sticking to their commitment to cut output in the first half of the year.

“OPEC crude production fell by 1 million b/d to 32.06 million b/d in January, leading to record initial compliance of 90% with the output agreement,” the International Energy Agency said Friday in its latest monthly oil market report.

Source: Platts 

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