UpdateKuwait further cuts term naphtha offers to Asia buyers

18 February 2011 05:55  [Source: ICIS news]

SINGAPORE (ICIS)--Kuwait Petroleum Corp (KPC) has reduced its term naphtha price offer to customers in Asia for April 2011-March 2012 supply for a second time this week mainly because of a bearish Asian market, traders said on Friday.

The offer for full-range naphtha dropped to a premium of $18-19/tonne for Middle East quotes FOB (free on board), down from a premium of $21/tonne (€16/tonne), they said.

“The Asian market is bearish because of huge arbitrage cargoes from the West. Demand is weak,” a trader said.

Kuwait Petroleum had initially offered to sell term supplies at plus $22/tonne. There were no takers so far, traders said.

In a sign of a bearish market, Asian naphtha crack spread versus Brent crude futures slumped to a near five-month low of $104.60/tonne on Thursday, ICIS data showed.

The Asian market was mired in a supply deluge as the peak cracker turnaround season started this month.

In its most recent term deal, KPC agreed to sell naphtha for December 2010-November 2011 lifting at a premium of $12/tonne to Middle East quotes FOB and light naphtha at a premium of $13/tonne to Middle East quotes FOB, traders said.

KPC’s August 2010-July 2011 naphtha term contract was settled at Middle East quotes FOB plus $21/tonne, according to the traders.

Meanwhile, the term premiums for its April 2010–March 2011 naphtha contract were at market quotes plus $22/tonne.

($1 = €0.74)

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By: Felicia Loo

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