Indian Oil Corp realizes unexpected premiums on naphtha in a firm market

Indian Oil Corp (IOC) has concluded two deals for a total of 66,500 tons of naphtha to Vitol at unexpected premiums in a firmer market. As compared to previous transactions, the premiums realized have been lower than in one deal and almost same in another deal. This is a little surprising as market sentiments have firmed on robust demand, spot cargoes have thinned on an ongoing absence of European arbitrage cargoes. In fact, robust buying interest has propelled naphtha cracks to a near two-month high of US$109/ton premium. IOC has sold 35,000 tons by tender for Nov. 29-Dec. 2 lifting from Chennai at a premium of US$22/ton to its own price formula on a free-on-board (FOB) basis. – This premium is same as what it got for an earlier deal for Sept. 28-Oct.1 lifting from the same port to Itochu. In a second deal, IOC sold 30,500-31,500 ton to Vitol for Nov. 28-30 lifting from Dahej at US$11-12/ton over its price formula FOB. This is much lower than the US$15/ton premium realized in a previous transaction with Sempra paid for H2-October cargo lifting from the same port.
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