Glencore has purchased a Singaporean refinery from Shell and is reportedly buying spot cargoes of Middle Eastern crude for the facility. This move signals Glencore's increased activity in the physical oil market and reflects a broader trend of commodity traders acquiring refineries to gain direct access to refining capacity and hedge their exposure to crude oil price fluctuations.
Oil trading major Glencore has been buying spot cargoes of Middle Eastern crude grades for a Singaporean refinery it has recently acquired from Shell, anonymous traders have told Bloomberg. Glencore has bought in recent weeks at least three cargoes of Qatar’s Al-Shaheen crude and at least one of Abu Dhabi’s Upper Zakum of 500,000 barrels each for February loading, according to Bloomberg’s sources.
In this way, commodity traders gain direct access to a refinery to which they can send part of the crude they sell and become larger players in the crude options and futures market to hedge their exposure to physical crude oil. In recent months, the largest independent oil trading houses have acquired several refineries from Big Oil worldwide in consortia with other companies.
OIL TRADING REFINERY ACQUISITIONS COMMODITY TRADERS PHYSICAL OIL MARKET ENERGY SECTOR
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