SINGAPORE  - Kuwait Petroleum Corp (KPC) offered its full-range naphtha for December 2019 to November 2020 loading at $16 a tonne premium to Middle East quotes on a free-on-board basis, four industry sources said on Friday.

That is $2.50 a tonne, or 18.5%, higher that the contract for December 2018 to November 2019, which sold at $13.50 a tonne, Reuters data showed. 

State-owned KPC is also offering its light grade naphtha at a premium of $17.50 a tonne for the December 2019 to November 2020 period, also $2.50 a tonne higher than the prior year, the sources said.

At least one buyer has accepted KPC's offers for full range and light naphtha, some of the sources said.

This will set the stage for others to either follow the premiums or decline the term contract.

Buyers in the negotiation, which started on Monday in Singapore, include Japanese and South Korean companies.

"This is still high," said one of the four sources, who tracks naphtha deals. "Most traders think that the market could be bearish next year."

For most of this year, naphtha has had the lowest profit margins for refiners among diesel, gasoline, jet fuel and fuel oil because of persistent over supply. 

However, the Sept. 14 attacks on Saudi Arabia's oil production facilities caused most spot naphtha premiums to rise to their highest since the first-half of 2018. 

"This is bad timing for a negotiation (for buyers)," said a fifth source.

KPC has three 12-month naphtha contracts with Asian buyers starting in April, August and December.

Previous prices for KPC's December to November naphtha contracts (Premiums are in $ per tonne) Year Full Light

range Premiums

Premiums Dec 2018-Nov 2019 13.5 15 Dec 2017-Nov 2018 9.5 11 Dec 2016-Nov 2017 4 NA Dec 2015-Nov 2016 10 11 Dec 2014-Nov 2015 15 NA Dec 2013-Nov 2014 24.25 25.25 Dec 2012-Nov 2013 27 28 Dec 2011-Nov 2012 18.5 NA Dec 2010-Nov 2011 12 13 Dec 2009-Nov 2010 13 NA Dec 2008-Nov 2009 2 NA Dec 2007-Nov 2008 14.5 NA Dec 2006-Nov 2007 6.75 NA Dec 2005-Nov 2006 14.5 NA

 

(Reporting by Seng Li Peng; editing by Christian Schmollinger) ((Florence.Tan@thomsonreuters.com; +65 6870 3497; Reuters Messaging: florence.tan.thomsonreuters.com@reuter.net))