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More North Sea Crude Oil Heading To US, Asia – Trade


APRIL 15, 2009, 9:50 A.M. ET

LONDON (Dow Jones)–European traders are moving more North Sea crude oil cargoes to the U.S. and Asia as European demand remains sluggish, traders and shipping brokers said Wednesday.

The very large crude carrier Hero 1, chartered by Dutch trading house Vitol Holding B.V., left the North Sea after it completed loading at Sullom Voe, Scotland, late Monday, they said.

The destination of the supertanker remains unclear, but some traders said it might be the U.S. refining hub of Galveston, Texas.

There is likely to be about 1.4 million barrels of Forties crude oil and about 600,000 barrels of Brent, which is loaded at Sullom Voe, on the vessel, traders said.

Meanwhile, the VLCC Astro Taurus, chartered by Norwegian oil company StatoilHydro ASA (STO), is now loading at Hound Point, Scotland, and is likely to sail to South Korea, shipping brokers said.

This month, the VLCC Front Shanghai, booked by Royal Dutch Shell PLC (RDSA), left the North Sea for Galveston.

It had been moored off Southwold, eastern England, for more than three months, where it was used to store Forties crude, traders said.

In late March, Vitol moved the VLCC Eagle Vienna loaded with 2 million barrels of Forties to the U.S. Gulf of Mexico, with an option of 30-50 days of storage at a cost of $55,000 a day, shipping brokers said.

Since late February, around 11 million barrels of North Sea crude oil, mostly Forties crude, have been shipped to the Americas, mostly the U.S., according to Dow Jones Newswires’ record.

Slack demand from European refineries, partly due to maintenance season, forced traders to find more outlets for North Sea crude oil.

“(Crude) runs are fairly low (in Europe),” said a trader.

Heavy outflow also helped reduce floating storage of North Sea crude oil. Currently, three VLCCs are being used to store Forties crude, compared with eight in early February.

The VLCC Leander and Oliva, booked by Shell, are now moored off Southwold, while the Olympia, chartered by French oil company Total S.A. (TOT), stayed on waters off Rotterdam, traders said.

But some traders said floating storage of Forties may increase again due to weak demand and tumbling freight rates.

VLCC freight rates for the benchmark route from the Middle East to Japan has fallen to around Worldscale 26 from W40-W52 in early February, shipping brokers said.

Traders are now keeping a sharp eye out for Shell, which has snapped up lots of Forties cargoes over the past two weeks. It kept all seven cargoes for early May loading and also bought four cargoes for late April loading in the cash market.

“Looks like Shell will be on the look to fill some more,” said another trading source.

-By Sherry Su, Dow Jones Newswires; +44(0)20-7842-9329; [email protected] and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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