UPDATE 2-China makes rare diesel imports to cover domestic shortages

Fri Nov 4, 2011 8:52am GMT
 

* Chinese demand to weigh on shortage of diesel in Asia

* Unipec, PetroChina to import 320,000 T in Nov, Dec

* Asian diesel margins seen strengthening through early 2012

By Jessica Jaganathan and Cho Mee-young

SINGAPORE/SEOUL, Nov 4 (Reuters) - China's top refiners have bought about 320,000 tonnes of diesel to cover domestic shortages of the power-generating fuel, traders said on Friday, rare purchases by the world's second largest economy that will squeeze an already tight market.

Chinese demand would likely buoy refinery margins for producing diesel into the early months of 2012, industry sources and analysts said.

"The market is very tight right now," a trading source based in Singapore said. "There is no oil left in North Asia for spot buying and everyone's competing for barrels. We are very short of barrels right now."

Traders and industry sources said Unipec, the trading arm of China's top refiner Sinopec Corp , and the second-largest refiner PetroChina had bought a combined 240,000 tonnes for November delivery and 80,000 tonnes for December delivery.

Unipec's purchases were the first in over a year and the two companies bought almost half their tonnage from South Korea's Hyundai Oilbank and S-Oil , industry sources with knowledge of the deals said.   Continued...

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