S. Korea's GS Caltex buys North Sea Forties crude for January arrival
(Reuters) South Korea's GS Caltex Corp. has bought a cargo of Forties crude oil from Europe's North Sea, a spokesman said Friday, indicating that the arbitrage window for crude from the UK to Asia has opened.
GS Caltex, equally owned by Chevron Corp. and GS Energy, purchased 2 MMbbl of Forties for January arrival, the company spokesman said without giving any further details.
The narrowing of Brent's premium to Dubai swaps, or Brent-Dubai Exchange of Futures for Swaps (EFS) DUB-EFS-1M, to below $3/bbl this month has prompted Asian refiners like GS Caltex to turn their attention to arbitrage crude from Europe.
Cash Dubai has held above $48/bbl for most of October, significantly higher than Platts' September average for the crude at $43.33/bbl.
"The dated Brent timespread is weaker than Dubai's and that helps with the economics of buying Brent-linked crude," a trader based in Singapore said. Both British Forties and Kazakhstan CPC Blend crude are priced against dated Brent.
Earlier this month, GS Caltex and top refiner SK Energy bought 2 MMbbl of CPC Blend crude from Kazakhstan for delivery in November and December after an arbitrage window opened for delivery to Asia from the Mediterranean.
On top of the CPC Blend crude, GS Caltex, South Korea's second-largest refiner, made its first purchase of MMbbl of US Eagle Ford crude for a November arrival, showing US producers are actively seeking to supply crude since the lifting of the country's export ban.
Reporting By Jane Chung; Additional reporting by Mark Tay; Editing by Tom Hogue
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