LONDON–The sliding price of North Sea Forties crude, the main component of global benchmark Brent, is set to find support as up to 2 million barrels of the grade are set to leave the region for South Korea next month, according to shipping fixtures seen by Dow Jones Newswires Thursday.
Oil trading firm Trafigura Group moved to charter the Very Large Crude Carrier, or VLCC, FIDA to load Forties crude in Hound Point in the U.K. July 15 and ship it to South Korea, the fixtures showed. The cost of shipping is relatively low–around $3.7-$4.9 million, according to the fixtures.
A European Union-South Korean free trade agreement lets Korean refiners save 3% in import duties of North Sea oil grades.
The price of physical benchmark Brent, relative to which Forties crude is priced, has fallen sharply in recent days amid concerns over the global economy.
Furthermore, Forties’ discount to the marker has also widened. Crude traders said that ample supply of cheaper similar-quality grades is pressuring North Sea crude prices.
In Wednesday’s price-setting trade, a cargo of Forties was sold at a 60 cent discount to physical benchmark Brent.
– By Konstantin Rozhnov, Dow Jones Newswires