Asia Fuel Oil-HPCL offers 90,000T, Nov-Jan

Singapore, Oct 19: Hindustan Petroleum Corp. Ltd. (HPCL) has issued a tender offering three fuel oil cargoes totalling 90,000 tonnes for November-January loading, less than a week after selling a similar parcel at higher prices, traders said on Thursday.

The 380-centistoke (cst) cargoes, of 30,000 tonnes each, will be for loading from its Vizag terminal during Nov. 23-25, Dec. 12-16 and Jan. 2-6, on a free-on-board (FOB) basis.

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

Earlier this week, HPCL sold a similar parcel, of 0.998 kg per cubic metre density and 4.0 percent sulphur, to Vitol at a discount of around - a tonne to Singapore spot quotes, FOB, on a free-on-board (FOB) basis, up from a -discount previously.

''HPCL is probably encouraged by transaction levels from the last deal and decided to test the market further by offering all three cargoes. If they don't like the numbers, they can always hold back the later cargoes,'' a Singapore-based Asian trader said.

Two other Indian refiners, Indian Oil Corp. (IOC) and Mangalore Refinery&Petrochemical Ltd. (MRPL), have also sold November-loading parcels at higher prices compared to October-lifting lots.

Traders said the higher transaction levels, which is within expectations, were due to lower freight costs that were encouraging demand and a creating tighter market in November.

Freight rates for dirty tankers have come off by about 25-30 percent over the past two weeks, data from the Baltic Exchange showed.

The November market is tighter due to lower inflows, with Western supplies for the month at 1.4-1.5 million tonnes, well below the year's average of 2.53 million tonnes.

Indian refiners have also stepped up fuel oil exports in the past month, as the market emerged from record discounts in September.

The total volume of October-loading parcels stood at 315,000 tonnes, up 65.8 percent on-year and 16.7 percent on-month, but November-loading volumes were 12.7 percent lower on-year at 275,000 tonnes.

Total Indian volumes for the year to date stand at 2.75 million tonnes, well above last year's 1.83 million tonnes.

REUTERS