Naphtha buyers in term talks with Abu Dhabi National Oil Company (ADNOC) and Kuwait Petroleum Corporation (KPC) are locked in a standoff over what they deem to be high premiums for the supply of naphtha over the April 2011-March 2012 cycle, as per Platts.
No buyer acceptances have been heard yet. Last weekend, ADNOC offered splitter, low sulfur and paraffinic naphtha at premiums of US$19/mt, US$20/mt and US$21/mt, respectively, all priced basis the ADNOC formula, which is an average of FOB Arab Gulf naphtha assessments from Platts and Petroleum Argus. ADNOC’s term customers submitted counter-offer prices of a maximum of what was settled over the January-December 2011 cycle - at a premium of US$16.50-$18.50/mt to ADNOC's formula.
Meanwhile KPC has lowered its offer price for full range naphtha a second time, to a premium of US$20/mt to the Mean of Platts Arab Gulf naphtha assessments. KPC initially offered a premium of US$22/mt to MOPAG naphtha assessments, which was rejected by buyers. It subsequently lowered its offer to a premium of US$21/mt on widespread disappointment by players, but buyers have rejected the one dollar reduction was not enough, given that the premium for KPC's full range naphtha is usually around US$2/mt lower than that of the Abu Dhabi National Oil Co.'s offer price for splitter naphtha.
21-Feb-11 
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