Microsoft’s latest upgrade is finallyJuly 30, 2015 3:16
Supplies remain tight, eyes on 2011 contracts
Traders eye 2011 term contracts.
December 23, 2010 1:40 by Reuters
Low sulphur gas oil premiums in the Middle East held firm on the back of strong demand from East Africa, while gasoline and naphtha looked supported on persistently tight supplies, traders said.
The market is also keeping a close eye on 2011 term contract negotiations. Saudi Aramco is among those in talks with customers for its gas oil and gasoline purchases.
The state oil giant is looking to import 1-2 cargoes of gasoline and at least four cargoes of gas oil per month next year, trade sources said.
Following a second round of talks in Singapore last week, traders say, the customers were now waiting to hear from Aramco. They add that the company is seeking low sulphur gas oil, also known as 500 ppm for the first time in its gas oil purchases.
Low sulphur gas oil market has been tight, on the back of strong demand from East Africa, where several countries have shifted their gas oil purchases to 500 ppm gas oil.
Mozambique, Tanzania and Kenya are regular buyers.
Kenya this week purchased just above 144,000 tonnes of oil products through a tender, with around 21,500 tonnes of it consisting of a low sulphur gas oil parcel.
One trader pegged premiums for 500 ppm gas oil at $2.30-2.40 a barrel, around the same level from last week’s $2.35 a barrel.
Refinery outages due to maintenance work has kept gasoline supplies tight in the region, traders said. “The market is very firm at the front end,” one gasoline trader said.
“Oman refinery is back online but still the market will remain tight in January as well,” he said.
He pegged gasoline premiums at Middle East benchmark naphtha quotes plus high 40s, almost unchanged from last week.
Traders are still watching Iran, a major gasoline importer before the U.S.-led international sanctions prompted suppliers to halt business with the Islamic Republic.
But Tehran looks to have found ways to bypass sanctions as it increased its gasoline imports by 75 percent in November, compared with the previous month, traders said.
The world’s fifth-largest crude exporter has also managed to import small amounts of jet fuel from neighbour Turkey in October, after several of its planes were refused fuel in European airports.
Persistent tightness in the naphtha market supported the premiums, traders said, adding the upcoming refinery maintenance in Saudi Arabia will crimp Middle Eastern supplies at a time when petrochemical units are running at full capacity.
“The market is getting increasingly tight,” one naphtha trader said. “Now it is quiet ahead of holidays but I don’t see it getting any better in the new year,” he said.
About 100,000 tonnes of naphtha scheduled for January loading from Saudi Arabia will be delayed by one-to-two weeks due to tight supplies, traders said on Wednesday.
State-owned Egyptian General Petroleum Corp (EGPC) sold as much as 525,000 tonnes of naphtha for first-half 2011 lifting from Suez at higher premiums versus an earlier term deal.
Oil major ExxonMobil and joint-venture partner Saudi Aramco have sold up to 180,000 tonnes of January-loading high-viscosity fuel oil at steady to weaker price levels, amid tight cutter supplies in the Middle East, traders said on Thursday.
“Premiums have been holding up,” one fuel oil trader said, quoting bunker prices for 180 centistoke (cst) at around $3-4 a tonne above Middle East spot quotes, from $3 a tonne last week.
(Reporting by Humeyra Pamuk; editing by James Jukwey)