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India's Essar Oil has sold a 180-centistoke (cst) cargo of fuel oil via tender to UAE-based fuel oil trader FAL Oil, Reuters reports.

The 60,000-tonne parcel is reported to be scheduled for loading from the northwestern port of Vadinar, in Jamnagar, Gujarat on August 27-31.

Sharjah-based FAL Oil is understood to have paid a premium of $4.50 - $5.50 per metric tonne to Middle East spot quotes on a free on board (FOB) basis.

Essar previously sold two simlar sized cargoes of 180-cst to FAL Oil for lifting on July 28-August 1 and August 21-21 from Vadinar at an undisclosed price.

The company also sold two other 60,000-tonne cargoes of 180-cst fuel oil to FAL Oil for lifting from Vadinar on May 17-21 and May 30-June.

Asian fuel oil market fundamentals have recently softened following a drop in bunker fuel demand and an increase in fuel oil arbitrage flows from the West. This follows a period of strengthening market fundamentals over the last few months on reduced refinery runs, a spillover from a firm Middle East market and steady demand from the Asian marine fuels sector.

However, with further production cuts forecast for this year and the expectation of tighter supplies, further downside is likely to be limited.

Vadinar is the location of Essar's US$2.14 billion refinery. The oil terminal at Vadinar is operated by Vadinar Oil Terminal Ltd. (VOTL), a wholly owned subsidiary of Essar Shipping & Logistics Ltd. The 32 million tonne terminal facility began operating in September 2007.

Essar's refinery in Vadinar is able to produce 10.5 million tonners per annum and is ideally located on India's West Coast in close proximity to the crude rich Gulf States. Vadinar is an all-weather deep-draft natural port and over 60 percent of India's crude imports land in and around this region.