Singapore: Abu Dhabi National Oil Co. (Adnoc) has offered its term naphtha supplies at $19.50-$22.00 a tonne premium to its own price formula, and at least one buyer has accepted, traders involved in the deal said on Friday.
Adnoc, Asia's third-largest naphtha supplier after Saudi Aramco and Kuwait Petroleum Corp (KPC), raised its July 2008-June 2009 offers by 8.5-10 per cent over its July 2007-June 2008 premiums on the back of tight spot supplies.
"The market is a little tight. We do not have that many choices but to accept their premiums," said a customer who embraced Adnoc's splitter naphtha grade offer at a $19.50 per tonne premium and low sulfur naphtha grade at a $20.50 per tonne premium to Adnoc's price formula.
Vacuum
Limited European arbitrage parcels flowing into Asia have created a supply vacuum.
The supply side has also been tightened by KPC cutting its naphtha exports by about 1 million tonnes to around 6 million tonnes from next year, and by Projector's inability to supply cargoes to South Korean customers because of credit issues.
These factors should favour Adnoc, which will likely end its term negotiations early next week. There are at least nine buyers involved in the talks, which began on June 9.
