HPCL offers 80,000 tonnes of oil in July-Aug

SINGAPORE, June 28: India's Hindustan Petroleum Corp. Ltd. (HPCL) has issued a tender offering 80,000 tonnes of fuel oil for July-August lifting, its second export tender over a one-month period, traders said on Wednesday.

The refiner has offered two 180-centistoke (cst) parcels, of 40,000 tonnes each, for July 20-25 and Aug. 10-15 loading from its Vizag terminal, on a free-on-board (FOB) basis.

The tender for the parcels, of maximum 4.0 percent sulphur and 0.998 kg per cubic metre density, will close on July 3 and remain valid till later on the same day.

With the latest offers, Indian refiners have sold or offered unusually high volumes totalling 1.97 million tonnes this year, exceeding last year's total of 1.83 million tonnes.

The large volumes were spurred by surging Singapore benchmark prices in April and May, high domestic refinery runs and an increase in refining capacity as some new units come onstream, as well as flat domestic demand.

Indian refineries, which have been running flat out in recent months, will have to seek alternative outlets, probably the domestic market.

However, exports are expected to shrink from July as the benchmark Singapore market has weakened substantially since the start of the month.

Average monthly prices for June were at 9.00 a tonne as of Tuesday, down from the May average of 9.35. The product's front-month crack spread to Dubai has also plunged to an all-time low of .45 a barrel on Wednesday.

With the latest HPCL offers, Indian refiners have sold or offered 280,000 tonnes for July, down 5.1 percent on-month but up from more than threefold from the same month last year.

HPCL last sold three similar parcels, of 30,000 tonnes each for July-Sept loading, to Vitol and Mitsui at discounts of - a tonne to Singapore spot 380-cst quotes, FOB.

REUTERS