November 06, 2024 [Reuters]- Trading firms will deliver about 5 million barrels of Middle East crude oil to the Shanghai International Energy Exchange (INE) this month, an unusually large volume, after domestic prices rose against global benchmark Brent, trade sources said.

The volume of oil to be delivered into the November contract was likely the biggest for the year, one of the sources said, as trade was mostly muted through 2024.

Vitol will deliver the most crude to INE, about 3 million barrels, including about 840,000 barrels of Abu Dhabi Murban crude and 2 million barrels of Iraqi Basra Medium crude, the sources said.

Private refiner Shenghong Petrochemical sold about 1 million barrels Qatar Marine crude while state Chinese firm Zhenhua Oil will deliver 1 million barrels of Basra Medium crude, they added.

The companies typically do not comment on commercial trades. INE did not respond to a request for comment.

Some of these trades were conducted last month after INE’s November crude futures surged above ICE Brent future , creating an arbitrage opportunity for traders who can deliver Middle East oil into INE to fetch higher prices, another source said.

The price gap was as wide as $3 a barrel at one point, the source added.

Brent jumped 4% on Oct. 11 on concerns that Israel may strike Iran’s oil infrastructure and disrupt supplies in the Middle East, and as U.S. fuel use spiked before Hurricane Milton barrelled across Florida.

The deliveries also reduced supplies held by these traders, creating space for future purchases at lower price levels, the sources said.