SINGAPORE: Saudi Aramco sold 280,000 barrels of end-July loading vacuum gas oil (VGO) to a European trading house at a much higher price than its previous deal for shipment to the United States, trade sources said on Wednesday. The cargo, for July 28-30 lifting from its 550,000 barrel-per-day (bpd) Ras Tanura refinery, was transacted at a premium of around $80.00 a ton to Singapore spot 180-cst quotes, free-on-board (FOB) basis, well above the previous deal for an end-June parcel at a $39.00 premium. "The cargo is likely to be destined for the US refining market as VGO is quite a good feedstock," a Singapore-based Western trader said. "The high transaction price reflects the current state of the market there, where supplies are tight and prices are relatively higher." Traders said Aramco rarely sells VGO cargoes and the current parcel is its third sale in the past one month to the United States. The second cargo was sold to US-based Koch Refining. The state oil company usually exports VGO when there is an outage at its hydrocracker, a unit which further processes the feedstock into higher-value products. However, in this case, traders said there are no problems with the gas oil-making secondary refining unit and that these are surplus cargoes from Aramco's system, which are normally stored for future domestic use. "The market for VGO is good and at $80 premiums, it's very good value," another trader said. "There are no problems with the hydrocracker, it's just surplus stocks that they have decided to sell because prices are good." The import of VGO comes as US crude oil stocks dwindled for the third-straight time last week as imports fell again in the face of two-week high global crude prices, an expanded Reuters poll of analysts showed ahead of government data due later on Wednesday. However, data from industry group American Petroleum Institute, showed on Tuesday that domestic crude stocks rose 1.7 million barrels.
