SINGAPORE (Reuters) - Oil producer Chevron (CVX.N) plans to move a cargo of Forties crude to South Korea, its second in two weeks, as ample supply depressed spot differentials of the European benchmark grade, trade and shipping sources said on Monday.
The move will drain excess crude supply in Europe and meet robust demand from South Korean refiners.
Chevron has provisionally booked Very Large Crude Carrier (VLCC) Achilleas to load 2 million barrels of Forties crude at Hound Point on May 5 for $7.75 million, a shipping fixture showed. The vessel will head for South Korea.
Chevron’s joint venture refinery GS Caltex is likely to receive this cargo, traders said.
This will be its second cargo in the same number of weeks as it has just fixed VLCC Mesdar to load 2 million barrels of Forties on April 22 for GS Caltex. The refiner has been buying 2 million barrels of Forties each month since March.
Asia has been receiving a steady volume of 4 million barrels of crude from Europe each month after a tax incentive in South Korea combined with attractive arbitrage economics drew the first ship, which loaded in December.
In April, Statoil sold 2 million barrels of Norwegian Troll and Gullfaks crude to SK Energy to be loaded in mid-April.
Reporting by Florence Tan; Editing by Himani Sarkar