SINGAPORE: Kuwait Petroleum Corp (KPC) has set the premium for its 12-month naphtha contract starting August at $20 (Dh73.4) a tonne to Middle East quotes on a free-on-board (FOB) basis, more than double the premium of the contract expiring in July, traders said.
KPC and its buyers do not typically comment on deals, citing confidentially reasons.
The high premium for the full-range grade came as no surprise to some traders who closely track the naphtha market.
This is because KPC’s negotiations with its Asian buyers, which started this week in London, came shortly after United Emirates’ Abu Dhabi National Oil Co (ADNOC) in late May sealed a term contract at sharply higher premiums.
Demand and tighter supplies caused by lower incoming cargoes from the West including Europe have been keeping fundamentals strong.
Last June, KPC fixed the August 2017 to July 2018 contract premium at $8 a tonne for the full-range grade.
Asia is structurally short of naphtha and relies on the Middle East to fill most of the supply void.
— Reuters
