HPCL offers 60-80KT for Oct/Nov

SINGAPORE, Oct 2 (Reuters) Hindustan Petroleum Corp. Ltd. (HPCL) has issued a tender offering two cargoes of 60,000-80,000 tonnes of October/November fuel oil, as the market recovers from its worst-ever slump, traders said on Monday.

The 380-centistoke (cst) cargoes, 0.99 kg per cubic metre density and 4.5 percent sulphur, are for loading from its Mumbai refinery on a free-on-board (FOB) basis.

The first parcel is for Oct. 22-31 loading while the second is for lifting on Nov. 1-10. The tender closes on Oct. 5 and will remain valid till later the same day.

The state refiner last sold a similar lot about a week ago at a discount of around a tonne to Singapore spot quotes, FOB.

''It would seem that the Indian refiners are coming back after being put off by the rock-bottom bids last month. Almost every single one of them have either done deals or has something out there in the past week or so,'' a Singapore-based Asian trader said.

''I wouldn't say that current deal levels at discounts of around - a tonne are fantastic but, at least, they are better than the minus levels from a month ago and going forward, it should get better.'' Two other refiners -- Mangalore Refinery&Petrochemicals Ltd.

(MRPL) and Indian Oil Corp. (IOC) -- have outstanding tenders that will expire this week while Bharat Petroleum Corp. Ltd. (BPCL) has just completed a sale last week.

The current HPCL parcel is expected to be sold into the Singapore bunkers market and the 380-cst market has picked up substantially over the past week.

Differentials for the bunkers grade 380-cst are on the verge of turning positive, closing at parity to slightly positive levels over the past two sessions for the first time in over four months.

However, transaction levels for Indian cargoes are still low compared to typical levels of minus - a tonne to spot quotes.

Indian volumes, sold or offered for October including the current offer, were at a year high of 345,000 tonnes, about 80 percent more than October 2005.

REUTERS CS VV1431