Singapore: India’s Oil and Natural Gas Corp. (ONGC) has sold via tender a cargo of February-loading Sokol crude at a stronger premium, lifting the grade from its previous record-low premium, traders said on Monday.
The equity producer sold the cargo at a premium of $4.00 to Oman/Dubai quotes, or even above that level, up from a $3.25 premium for a February-loading cargo in its previous tender.
Traders expressed surprise at the stronger premium.
“I don’t think there is any fundamental change in Sokol economics. Distillates have not improved dramatically, but rather could be a bit weaker. The only reason I can think of is naphtha,” a trader said.
“Or it could be arbitrage economics and a cheap freight cost,” he added.
Light sweet, middle distillate-rich, Sokol crude has hit a series of record-lows this year on a weakening gas oil crack and a plunging naphtha crack, which fell to discounts in October for the first time since 2001.