India Essar sells H1 May; premium down

Singapore, May 8: India's Essar Oil Ltd has sold a 30,000-tonne naphtha cargo for first-half May loading to Glencore at a lower premium than its previous sale, a trading source said on Tuesday.

Essar sold the May 11-12 loading cargo at about a tonne above Middle East spot quotes, on a free-on-board (FOB) basis.

The Indian refiner last sold a 28,000-to-29,000-tonne cargo for May 1-2 loading to Vitol at a -to--premium to the same quotes, FOB.

The spot differential for Indian naphtha cargoes have fallen, as its export volume has recovered from April-loading supplies.

But it remains at premium levels because of tight supplies in the Asian market due to fewer arbitrage cargoes from Europe, where demand is high for blending into gasoline as the peak season approaches.

State-run Indian refiners have sold up to 581,000 tonnes of naphtha for April and up to 551,000 tonnes for May, versus less than 500,000 tonnes shipped each in February and March.

On top of that, private refiners normally sell another 200,000 tonnes every month through tenders or private negotiations.

Essar Oil's refinery is the second to be set up by a private firm in India's state-dominated oil sector, and it exports about 70,000 tonnes a month of naphtha, the feedstock used to produce ethylene and propylene, the building blocks for the chemical sector.

Top private company Reliance Industries Ltd. , which runs a 660,000 barrels per day refinery also in western India, exports some 130,000 tonnes of naphtha per month.

REUTERS>