Friday, January 08, 2010
SINGAPORE: Pakistan State Oil (PSO) bought almost 600,000 tons of high-sulphur fuel oil for first-quarter delivery at lower prices versus a previous deal, a relatively lower volume over the three-month period despite the peak winter season, traders said on Thursday.
High inventories, leading to lower demand from the country’s power plants, have led to the company extending the validity of the tender by 15 days and including March as a delivery period in case it needs to defer arrivals.
“It’s a case of overestimating requirements for winter in earlier tenders and ending up with high stocks,” a Singapore-based Western trader said.
“But over the course of the year, demand should be fairly steady at around 5-6 million tons for the year.”
The current tender, for nine 125- or 180-centistoke (cst) cargoes of 65,000 tons each, was awarded to regular suppliers FAL Oil and Bakri, both Middle East traders, at premiums of $21.00-$24.00 a ton to Middle East spot quotes, on a cost-and-freight (C&F) basis to Karachi.
The previous tender, for December-January delivery cargoes, was transacted at $24.00-$29.00 a ton premiums.
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