September 27, 2019 / 5:25 AM / 25 days ago

UPDATE 1-Kuwait Petroleum raises Dec to Nov 2020 naphtha offers by 19% from year ago

 (Adds details, comments)
    By Seng Li Peng
    SINGAPORE, Sept 27 (Reuters) - Kuwait Petroleum Corp (KPC)
offered its full-range naphtha for December 2019 to November
2020 loading at $16 a tonne premium to Middle East quotes on a
free-on-board basis, four industry sources said on Friday.
    That is $2.50 a tonne, or 18.5%, higher that the contract
for December 2018 to November 2019, which sold at $13.50 a
tonne, Reuters data showed.            
    State-owned KPC is also offering its light grade naphtha at
a premium of $17.50 a tonne for the December 2019 to November
2020 period, also $2.50 a tonne higher than the prior year, the
sources said. 
    At least one buyer has accepted KPC's offers for full range
and light naphtha, some of the sources said.  
    This will set the stage for others to either follow the
premiums or decline the term contract. 
    Buyers in the negotiation, which started on Monday in
Singapore, include Japanese and South Korean companies.
    "This is still high," said one of the four sources, who
tracks naphtha deals. "Most traders think that the market could
be bearish next year." 
    For most of this year, naphtha has had the lowest profit
margins for refiners among diesel, gasoline, jet fuel and fuel
oil because of persistent over supply.
    However, the Sept. 14 attacks on Saudi Arabia's oil
production facilities caused most spot naphtha premiums to rise
to their highest since the first-half of 2018.

    "This is bad timing for a negotiation (for buyers)," said a
fifth source. 
    KPC has three 12-month naphtha contracts with Asian buyers
starting in April, August and December. 

Previous prices for KPC's December to November naphtha contracts
(Premiums are in $ per tonne)
 Year                  Full       Light
                       range      Premiums
 Dec 2018-Nov 2019     13.5       15
 Dec 2017-Nov 2018     9.5        11
 Dec 2016-Nov 2017     4          NA
 Dec 2015-Nov 2016     10         11
 Dec 2014-Nov 2015     15         NA
 Dec 2013-Nov 2014     24.25      25.25
 Dec 2012-Nov 2013     27         28
 Dec 2011-Nov 2012     18.5       NA
 Dec 2010-Nov 2011     12         13
 Dec 2009-Nov 2010     13         NA
 Dec 2008-Nov 2009     2          NA
 Dec 2007-Nov 2008     14.5       NA
 Dec 2006-Nov 2007     6.75       NA
 Dec 2005-Nov 2006     14.5       NA

 (Reporting by Seng Li Peng; editing by Christian Schmollinger)
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