LONDON (Dow Jones)–More North Sea crude is set to head to Asia in June, shipbrokers told Dow Jones Newswires Wednesday, continuing a trend that has helped prop up the price of oil in the North Sea region since it emerged at the end of last year.
Large volumes of oil have been seen flowing east in recent months, thanks in large part to a free trade agreement brokered last year between the European Union and South Korea.
According to shipping fixtures, at least 3 supertankers were booked to ship oil to South Korea in May, representing a not insignificant proportion of oil available in the North Sea.
“The danger for the Brent market however is that the artificial economics of Forties to South Korea starts to have too significant of an impact on the price-discovery value of the Brent contract, given that the shipments of Forties to South Korea have nothing to do with supply and demand factors,” said Olivier Jacob, managing director of Swiss consultancy Petromatrix in a note.
Forties crude is the main component of global benchmark Brent used to price more than half of the world’s oil.
The price of Forties crude has been strong this week, and traders said the flow of barrels east was helping to prop up prices.
According to a shipping fixture seen by Dow Jones Wednesday, Chevron Corp. (CVX) has booked the supertanker Overseas Mckinley to carry oil from the North Sea to South Korea on June 14. The cost of the shipment is $6.3 million, according to the fixture.
Ship brokers said there are also rumors of interest in another tanker to head east from the North Sea.
-By Sarah Kent, Dow Jones Newswires