Image Credit: Gulf News

Dubai: Sri Lanka's Ceylon Petroleum Corp (Ceypetco) is expected to sign a deal to import 720,000 tonnes of gas oil for a year from a UAE-based firm, industry sources said on Monday.

The UAE's Al Ain International Petroleum Derivatives Trader LLC gets its products from Russia, Egypt and Iran, as they are cheaper than in parts of the Middle East, the sources said.

A Russian producer would possibly supply Al Ain if the deal goes through, they added. They declined to name the company involved and Al Ain International, a family-owned company, declined to comment.

The cargoes of 0.25 per cent sulphur gas oil, for delivery beginning in September and continuing to August next year were offered at $4 (Dh14) a barrel below Singapore quotes, traders said.

Asian gas oil cracks sank for a second straight session on Monday to a more than one-week low, while its front-month contango reached its widest in a week as demand remained tepid in the face of rising supplies.

Gas oil differentials in the Middle East region have dropped, weighed down by cancelled cargoes from Pakistan because of the country's devastating floods, traders said on Thursday.