India's IOC buys Malaysia crude, second time in row

Singapore, June 15 (Reuters) Indian Oil Corp. (IOC) bought Malaysian Labuan crude in its tender for August, the second time in a row that it bought Asia-Pacific crude after having shied away from the grades for seven months, traders said on Friday.

IOC's renewed interest in Malaysian crude will bring support to the regional crude market, which has come under pressure as Indonesia, traditionally a major buyer of Asia Pacific grades, has started to buy West African crude instead.

State-run IOC bought 600,000 barrels of Labuan crude in its latest tender from Malaysia's state oil Petronas, traders said.

It also bought around 4 million barrels of August-loading West African crude, taking about 3 million barrels of Nigerian crude and 1 million barrels of Cameroon's Kole crude.

IOC bought 2 million barrels of Nigerian Escravos crude from European trader Vitol and a second Very Large Crude Carrier (VLCC) comprising one cargo of Nigerian Bonny Light and one cargo of Cameroon's Kole crude, from European trader Glencore, traders said.

The deals have not yet been confirmed.

Nigerian Escravos traded at around a $1 a barrel premium to dated BFO, while Bonny Light fetched a $2 premium. Kole was transacted at a heavier $2 discount, a trading source said.

IOC buys little regional crudes through tenders, as they are usually more expensive than West African grades.

It also bought Labuan crude last week for August loading through a tender.

IOC bought Asia-Pacific crude in three tenders in a row during the fourth quarter of 2006, when the spread between Tapis APPI and Brent fell below $4 a barrel. The spread averaged above $7 in May, but has fallen since the beginning of June.

IOC plans to boost crude imports by 2.4 percent to 840,000 barrels per day this financial year, an IOC official told Reuters last month.

The company aims to import 33 per cent of its crude through spot purchases, or about 277,000 bpd.

IOC, which has about 10 refineries spread across India for a total capacity of 1.204 million bpd, issues tenders several times a month to buy crude, mainly light sweet West African grades.

REUTERS KR DS1505