ADNOC accepts October term LPG nominations without cuts; advances loading dates

Singapore — Abu Dhabi National Oil Co announced acceptances of October-loading term cargo nominations without cuts or delays, with most lifters also getting advanced loading dates of up to 15 days, traders said on Sept. 11.

This was almost similar to ADNOC's acceptances of September-loading term nominations, which saw some lifters getting advanced loading dates of one to two weeks ahead of nominated loading dates, while sources said most exports would be in the first three weeks of September.

ADNOC's announcement followed Qatar Petroleum's, or QP, acceptance in the week ended Sept. 5 of October-loading term cargoes in line with nominations.

Ahead of Saudi Aramco's announcement of October-loading nominations expected later in the week starting Sept. 13, ADNOC's full acceptances of lifters' nominations and advanced loading dates, as well as offers of spot cargoes by QP and Kuwait Petroleum Corp., or KPC, point to healthy volumes of Middle Eastern cargoes slated for Asia.

Last month, Aramco also announced acceptances of September term LPG cargoes that were largely in line with lifters' nominations, with no cuts or delays. With the decision by OPEC+ to ease production cuts that could restore some oil supply to the markets, trade sources expect Saudi Aramco to also meet term buyers' nominated volumes and dates for October loading, as was seen for September.

OPEC and its allies pumped more crude in August, led by surges from Saudi Arabia, Russia and the UAE, a S&P Global Platts survey showed.

OPEC's 13 members produced 24.37 million b/d in August, a 4% rise from July, while its nine partners, including Russia, added 12.67 million b/d, a 6% increase, the survey found.

Many Middle Eastern members said they would need extra crude supplies for power generation during a hot August, when air-conditioning units are running at full tilt, and that their exports to the market would not substantially increase. Saudi Arabia raised production by 500,000 b/d month on month at 8.95 million b/d -- still under its quota -- with most extra barrels consumed in its peaking power plants, the survey found.

Some traders said ADNOC's acceptances of nominations with advanced loading dates for two consecutive months could point to healthy stock levels, or that the company could be more organized in its loading program.

"I heard it is their inventory issue, means their inventory level is relatively high," one north Asia trader said.

Traders also said QP's offer via tender of a 45,000-mt propane cargo for Oct. 6-7 loading, which was valid till Sept. 9, might have not been awarded due to a lack of offers and amid low prices, and some said QP might have reoffered a mixed cargo comprising 33,000 mt of propane and 11,000 mt of butane. However, this could not be immediately confirmed.

QATAR, KUWAIT TENDERS

"There should be reoffers, but price is the key," one trade source said.

Traders still awaited the result of KPC's tender offering 11,000 mt of propane and 33,000 mt of butane for Oct. 2-3 loading, which closed Sept. 10, amid concerns over whether there could be enough demand.

One trader said with ample supply from the Middle East, "there could put more downward pressure. While Indian demand is recovering, I heard new Chinese crackers are delayed in starting runs. The oversupplied market would be continuing."

State-owned refiners Indian Oil Corp., or IOC, and Bharat Petroleum Corp., or BPCL, recently bought spot LPG cargoes for September and October deliveries after a two-month lull, as the country's high

inventories draw down, port congestion ease, and spot prices are more attractive than term contracts, market sources said.

With the resumption of spot imports from India -- the biggest importer of Middle Eastern LPG -- the FOB AG propane and butane discounts have narrowed to around $15/mt on Sept. 9 from the low $20s/mt

around early August. But traders were cautious on whether the narrowing discounts would persist amid uncertainty over buyers' interest or offer prices made into the QP and KPC tenders.