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SINGAPORE (Reuters) – European and Chinese traders are shipping a record 22 million barrels of crude from the North Sea and Azerbaijan to Asia this month, seeking to plug any supply gap left by OPEC production cuts.
Over 11 million barrels of North Sea Forties crude have either been offloaded or are on their way to Asia, adding to a record 11 million barrels of Azeri crude oil from Azerbaijan, Reuters oil trade flows data showed.
Record - Export - Volumes - Expectations - Middle
The record export volumes come on expectations of tighter Middle East crude supplies due to plans by the Organization of the Petroleum Exporting Countries (OPEC) to cut production in an attempt to prop up prices.
Seeing an opportunity to sell North Sea oil profitably in arbitrage deals to Asia, seven supertankers chartered by commodity traders Vitol and Mercuria, European oil major Royal Dutch Shell, and China’s refiner Unipec, have either delivered or are expected to soon offload European crude to China and South Korea this month, according to trade sources and Reuters data.
Asia - Oil - Europe - OPEC - Cut
“Asia needs the oil, Europe has it. The OPEC cut has raised prices, and that now makes it profitable to send European oil to Asia,” said one senior trader with knowledge of the deals on condition of anonymity as he is not allowed to talk to media.
December’s OPEC deal, in which the group agreed to cut production by 1.2 million barrels per day (bpd) in the first half of 2017, pushed up benchmark price...
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