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India expected to buy 250kt diesel in March tender

SINGAPORE: State-owned Indian Oil Corp (IOC) was expected to award up to 250,000 tonnes of diesel in its second March buy tender, traders said on Friday.

This would be equivalent to five to eight cargoes of 30,000 to 45,000 tonnes each, they said.

IOC bought a total of 255,000 tonnes in seven diesel cargoes in a tender for deliveries in the first half of March, which was awarded two weeks ago.

After that award, a senior Indian official told Reuters that India would buy three more cargoes in March as a cushion for demand during the upcoming Indian state elections.

But traders on Friday said they expected IOC to buy more than three cargoes, a factor which has helped drive Asian gas oil prices up sharply this week.

"I think they will buy five to six cargoes," one trader with a Western oil company said.

"But even that is super bullish for the market as refinery runs are below normal and the Middle East market is tight."

Another trader, with an oil major, said that he expected India to purchase at least seven to eight cargoes in the tender.

India has bought up to 855,000 tonnes of diesel for the first quarter of 2000, surprising the market because it had become self sufficient in diesel supply late in 1999.

IOC was prompted back into the spot market following a series of refinery problems and maintenance shutdowns.

IOC was expected to award the latest diesel tender, its fifth for the year, later on Friday. But traders said they suspected India might issue yet another tender to seek deliveries of diesel during April.

The latest tender closed on Thursday and sought 0.25-percent sulphur diesel cargoes in 30,000-tonne sizes for delivery to the west coast Indian ports of Goa/Bombay and 40,000 to 45,000 tonne sizes for delivery to the east coast ports of Madras/Haldia.

Sellers were asked to offer dates in the entire month of March for west coast India and only for the last two weeks of March for the east coast deliveries.-Reuters