BPCL offers 25KT for early Nov fuel oil cargo

SINGAPORE, Oct 13: Bharat Petroleum Corp. Ltd. (BPCL) has issued a tender offering an early-November fuel oil cargo totalling 25,000 tonnes in an improving market, traders said on Friday.

The 380-centistoke (cst) cargo, of 4.5 percent sulphur and 0.995 kg per cubic metre density, is for Nov. 6-10 loading from Kochi, on a free-on-board (FOB) basis.

The tender closes on Oct. 19 and will remain valid till a day later.

Three Indian refiners, including BPCL, had already sold or offered about 150,000 tonnes of similar high-density, high-sulphur cargoes into Singapore at discounts of - a tonne to Singapore spot quotes over the past month.

The transaction levels are still well below typical discounts of - a tonne to Singapore spot quotes before the market fell into its worst-ever slump in late August.

Traders expect the current tender to be concluded at similar levels despite forecasts of a firmer East Asian fuel oil market in November due to low inflows because the region is amply supplied with such high-density cargoes.

''The market is tight on density. The cargo is high density and there's ample volumes of such materials around, so I don't really see a lot of demand for it,'' a Singapore-based Western trader said.

Demand for low-density cargoes, of 0.97-0.98 kg per cu m., has risen with firming Chinese demand for October-arrival cracked parcels and Vietnam seeking 338,000 tonnes to meet fourth-quarter demand.

BPCL last sold two similar parcels to Vitol and argill respectively at a discount of - a tonne to Singapore spot quotes, on an FOB basis.

October Western inflows were 1.7-1.8 million tonnes, well below this year's monthly average of 2.53 million tonnes, with another 1.4 million tonnes fixed for November so far.

Indian volumes, sold or offered for this year, were at a two-year high at 2.69 million tonnes, well above last year's 1.83 million tonnes.

REUTERS