(Bloomberg) -- Oil trader Petroineos has been snapping up benchmark crude in the North Sea market at the fastest pace in at least 16 years, leaving rivals surprised by the flurry of activity.
The firm — a joint venture of state-owned PetroChina Co. and UK billionaire Jim Ratcliffe’s Ineos Group Plc — this month has bought eight cargoes of grades that make up the key Dated Brent pricing benchmark for actual barrels of oil.
The total volume, 5.6 million barrels, is the most purchased by Petroineos over a 12-day period since at least 2008, when Bloomberg started compiling the data. It has also been bidding in the intricate web of derivatives contracts tied to Dated Brent.
The North Sea market is often subject to significant buying activity from one trading house or another each month, but the breadth of cargoes and participants make it difficult to influence pricing. Dated Brent is used as a basis for setting many other physical oil prices around the world and also feeds into Brent crude futures.
Petroineos is a regular player in the region, though the unusual amount of recent buying by the company has raised questions about what it plans to do with the crude. The deals take place against a softening in global oil prices since the start of the month and a deluge of offers in the North Sea market by other companies so far in November.
The company could process the barrels at its refineries in the region, sell them on again or send them to another location, most likely Asia, according to traders. The latter would incur additional shipping costs.
Petroineos declined to comment.
The company owns and operates a refinery in Scotland that is scheduled to close early next year, and another in France, with a combined capacity of 360,000 barrels a day. Both typically consume oil tied to Dated Brent. Last year, Petroineos hired veteran trader Zhang Yufeng, formerly the head of PetroChina’s crude desk in Singapore, to lead its global benchmark team.
The firm’s crude oil purchases this month include four cargoes of WTI Midland, three Forties, and one Brent — all in the pricing window run by S&P Global Commodity Insights, better known as Platts. The Dated Brent price is set by a basket of six grades — Brent, Forties, Oseberg, Ekofisk, Troll and WTI Midland.
--With assistance from Yongchang Chin and Sarah Chen.
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