The premium for 500 ppm sulfur gasoil loading from the Persian Gulf could rise next year on higher regional demand as well as more cargoes moving to Africa and the Red Sea area, trading sources said this week.
With Saudi Aramco switching to cleaner fuels in Gizan, in the Red Sea area, the supply of the 500 ppm sulfur gasoil grade is expected to tighten as the refiner pulls in term barrels, they added.
"When Saudi Aramco starts receiving the barrels, [supply of 500 ppm sulfur gasoil is] going to be tight ... I think the premiums might even cross the $3/b mark," said a trading source based in the Middle East.
The premium for the 500 ppm sulfur gasoil loading from the Persian Gulf region was assessed at $2.40/b above Mean of Platts Arab Gulf 0.5% sulfur gasoil assessments Wednesday.
No recent spot deals were heard for the 500 ppm sulfur gasoil, sources said.
Saudi Aramco plans to import 500 ppm sulfur gasoil into Gizan in February, the first time it will be doing so. It imports some 500 ppm sulfur gasoil into Jeddah every year, but it has been importing only 0.5% sulfur gasoil into Gizan.
The change to 500 ppm gasoil is in line with Saudi Aramco's plans to switch to cleaner fuels.
Its recent negotiations were for at least 1.44 million mt of gasoil to be imported into the Red Sea next year, with most cargoes expected to be shipped from the Persian Gulf region, putting pressure on spot supplies, sources said.
Meanwhile, Kuwait Petroleum Corporation is also expected to have limited 500 ppm gasoil spot cargoes next year as it focuses on term supply contracts and ventures into new regions in Africa, a source close to the matter said.
It is negotiating with Kenya for a term contract to supply about 25,000 mt of 500 ppm sulfur gasoil every month in 2011.
It also inked a three-year deal with Egyptian General Petroleum recently to supply 1 million mt of diesel and 200,000 mt of jet fuel annually.
South Africa's Engen has extended the maintenance at its 118,750 b/d Durban refinery on the southeastern coast to end of January due to some problems in its reformer furnace, an official from the company told Platts mid-December.
It imported 510,000 mt of 500 ppm sulfur gasoil to make up for the shortfall, with much of the supply coming from the Middle East and Singapore, sources said.
"The market is very tight right now with South Africa buying so many cargoes ... and there's not a lot of [500 ppm gasoil] being pushed out by the refiners for exports," said a trading source based in the Middle East.
With Saudi Aramco switching to cleaner fuels in Gizan, in the Red Sea area, the supply of the 500 ppm sulfur gasoil grade is expected to tighten as the refiner pulls in term barrels, they added.
"When Saudi Aramco starts receiving the barrels, [supply of 500 ppm sulfur gasoil is] going to be tight ... I think the premiums might even cross the $3/b mark," said a trading source based in the Middle East.
The premium for the 500 ppm sulfur gasoil loading from the Persian Gulf region was assessed at $2.40/b above Mean of Platts Arab Gulf 0.5% sulfur gasoil assessments Wednesday.
No recent spot deals were heard for the 500 ppm sulfur gasoil, sources said.
Saudi Aramco plans to import 500 ppm sulfur gasoil into Gizan in February, the first time it will be doing so. It imports some 500 ppm sulfur gasoil into Jeddah every year, but it has been importing only 0.5% sulfur gasoil into Gizan.
The change to 500 ppm gasoil is in line with Saudi Aramco's plans to switch to cleaner fuels.
Its recent negotiations were for at least 1.44 million mt of gasoil to be imported into the Red Sea next year, with most cargoes expected to be shipped from the Persian Gulf region, putting pressure on spot supplies, sources said.
Meanwhile, Kuwait Petroleum Corporation is also expected to have limited 500 ppm gasoil spot cargoes next year as it focuses on term supply contracts and ventures into new regions in Africa, a source close to the matter said.
It is negotiating with Kenya for a term contract to supply about 25,000 mt of 500 ppm sulfur gasoil every month in 2011.
It also inked a three-year deal with Egyptian General Petroleum recently to supply 1 million mt of diesel and 200,000 mt of jet fuel annually.
South Africa's Engen has extended the maintenance at its 118,750 b/d Durban refinery on the southeastern coast to end of January due to some problems in its reformer furnace, an official from the company told Platts mid-December.
It imported 510,000 mt of 500 ppm sulfur gasoil to make up for the shortfall, with much of the supply coming from the Middle East and Singapore, sources said.
"The market is very tight right now with South Africa buying so many cargoes ... and there's not a lot of [500 ppm gasoil] being pushed out by the refiners for exports," said a trading source based in the Middle East.
