SINGAPORE, July 9, (RTRS): Kuwait Petroleum Corp (KPC) cancelled a tender to sell 24,000 tonnes of light naphtha for early August loading due to low bids, dragged down by rising supplies and cracker outage in Taiwan, traders said on Friday.
KPC had previously sold around 150,000 tonnes of naphtha for July loading — comprising both light and full-range grade — at premiums in the high single-digit a tonne level to Middle East quotes on a free-on-board (FOB) basis.
Indian refiners were also grappling with premiums that were falling at rapid pace.
“Formosa’s cracker shutdown had a great impact,” said a trader.
The privately run refiner, Asia’s top naphtha buyer, shut a 700,000 tonne-per-year (tpy) cracker on Wednesday following a fire.
That brought cracks, the premiums/losses of refining Brent crude into naphtha, to a near-month low at below $77.00 a tonne each on Wednesday and Thursday.

Sold
Aramco sold a 55,000-tonne naphtha parcel for co-loading from Yanbu and Jeddah at premiums of around $8.00 to $9.00 a tonne to its own price formula on a free-on-board basis, slightly lower than a previous sale from Jubail.
At least 700,000 tonnes of spot naphtha would be exported for July-August loading from Saudi, Qatar, the UAE and Kuwait.
Term buyers in Asia have either dropped contracts or reduced volumes that they buy from Middle East producers due to high premiums and poor margins.
Naphtha refining margins in Asia hit a nine-month low on Wednesday after a cracker outage in Taiwan.
Exxon Mobil offered its second high-viscosity fuel oil parcel from Yanbu for the month, although supplies have been thinner in July, traders said.
It offered a 90,000-tonne parcel of 700-centistoke (cst) fuel oil for July 28-30 lifting from the joint-venture Samref refinery on a free-on-board basis.
The Singapore market is tightening, so the cargo could be the first one shipped there for a over a month, one trader said.
Saudi has shipped around 180,000 tonnes of July fuel oil so far, down from June volume of 650,000-700,000 tonnes.
Still, exports from Kuwait have filled some of the gap, and prices in the Middle East have lagged rises in the Singapore market. Fujairah marine fuel prices have fallen below Singapore levels by $1 to $2 a tonne, after holding a premium of $4 to $6 for the past two weeks.
Through a tender, Pakistan State Oil bought 65,000 tonnes of fuel oil for July delivery to Karachi’s FOTCO terminal. It bought three different grades: 25,000 tonnes of 180-cst high sulphur fuel oil (HSFO), 30,000 tonnes of 380-cst HSFO and 10,000 tonnes of low viscosity fuel oil.
The 180-cst parcel was sold at a premium of $17.40 per tonne to Middle East spot quotes, while the 380-cst went for a premium of around $23 a tonne. The low viscosity fuel oil was concluded at around $70 a tonne above Middle East spot quotes, traders said.
Emirates National Oil Company (ENOC) has ceased bunkering operations at Fujairah due to rising competition from other ports in the region. ENOC was less cost-competitive than its rivals, traders said.
Iran would import around 90,000 barrels per day (bpd) of gasoline in July, steady from June, traders said.
About half of that would come from Turkey, loading free-on-board from Tupras refineries in Izmir and Izmit onto vessels operated by the National Iranian Tanker Company (NITC), traders said.
The rest would come from Chinese suppliers, traders said.
Kuwait tendered to sell 30,000 tonnes of gas oil for loading in late July, a trader said. The tender was valid until next week, he added.
Meanwhile, the Middle East crude market was steady on Friday as traders awaited supply notices from Saudi Arabia, traders said.
The Asia-Pacific market became bearish after news that India’s Bharat Petroleum Corp Ltd (BPCL) bought 4 million barrels of rival African crude.
The appetite for September-loading crudes is not likely to be strong as demand has come off its peak and this comes even as freight rates for Middle East-Asia routes have declined sharply in the past month, traders said.
“Concerns still linger over the economic recovery,” a trader said. “I don’t expect demand to get much support from falling freight rates.”
No offers or bids for September-loading cargoes have been heard, but the discussions are set to start in earnest next week after refiners determine their requirements, another trader said.
- Saudi Arabia, the world’s top oil exporter, is expected to notify Asian customers this weekend that it will supply full volumes of term crude in August, unchanged from July, traders said.
Saudi has been supplying full term volumes this year to Asia and is expected to continue doing so in future as official selling prices (OSPs) to Asia are deemed more attractive than those for other regions.

Bids
- Malaysia’s Petco, the trading arm of Petronas, was heard to be bidding for 100,000 barrels of Indonesia’s Duri crude at a $2.90 a barrel discount to August ICE Brent.

Tenders
- BPMIGAS, Indonesia’s oil and gas regulator, is offering to sell Geragai condensate via a tender for loading between August and September, a trader said on Friday.
BPMIGAS is offering two 300,000-barrel shipments for loading in August and September, respectively, via a tender that closes on July 14.
- Indian refiner BPCL has bought 4 million barrels of Agbami, Qua Iboe and Algerian Saharan Blend for loading in August and September in a tender, traders said.
- Vitol was heard to have won Indian Oil Corp’s latest buy tender for September-loading sweet crude, but no further details could be confirmed.

Market news
- A South Korean court has ordered Abu Dhabi-based International Petroleum Investment Co to fulfill an international ruling to sell its controlling stake in a Korean refiner to Hyundai firms, Hyundai Heavy Industries said on Friday.

EFS
- The August Brent/Dubai Exchange of Futures for Swaps (EFS) was last valued at around $1.30 a barrel.
Prices
- Front-month ICE Brent crude for August delivery was up 28 cents at $74.99 a barrel by 0237 GMT.