Abu Dhabi Said to Reduce Naphtha Offer Prices for Asia Starting January
Abu Dhabi National Oil Co. reduced the offer prices for a year’s supply of naphtha to customers in Asia from January, according to three people who received notification.
The U.A.E. company, known as Adnoc, lowered its selling price for Pentane Plus naphtha to $18.50 a metric ton above benchmark Middle East prices, the people said, declining to be identified as talks are confidential. It is seeking to sell Low Sulfur grade at a premium of $17.50 a ton and Splitter grade at $16.50 a ton, the people said. An Adnoc spokesman in Abu Dhabi couldn’t be reached for immediate comment.
Adnoc last week offered Pentane Plus at $19 a ton, Low Sulfur at $18 a ton and Splitter at $17 a ton, two people with direct knowledge of the term discussions said Nov. 4.
The prices are still higher than those set by Adnoc in its previous round of contract negotiations in July and by Kuwait during its talks with buyers in October, because of increased spot prices in Asia. Prices of naphtha cargoes for delivery to Japan climbed 6.4 percent last month after refinery strikes in France reduced supplies.
For a year’s supplies starting October, Adnoc set its premiums for Splitter grade at $11.50 a ton and Pentane Plus at $12.50 a ton. It didn’t offer Low Sulfur grade. Kuwait Petroleum Corp. agreed last month to sell naphtha for December through November 2011 delivery at $12 to $13 a ton, bidders involved in negotiations said Oct. 8.
Persian Gulf oil producers such as Abu Dhabi and Kuwait sell most of their crude and refined products under long-term contracts. Naphtha, used in making petrochemicals and gasoline, is mainly sold under annual contracts negotiated at several intervals a year.
To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net
To contact the editor responsible for this story: Jane Lee in Kuala Lumpur at jalee@bloomberg.net
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