Russian Gazprom Neft, the oil arm of Russian gas giant Gazprom, looks more likely to return to the general tender system of trading in the domestic market after it announced a sell-tender Tuesday, sources said. It signals a move away from its electronic platform which was launched September 1 but which has been hit by sluggish demand and low trading liquidity.
The company announced a sell-tender Tuesday via an emailed tender notification letter to market participants to sell remaining volumes of diesel and HSFO for December deliveries. "This tender is for rather small volumes, so we decided to test whether the previous system is still working," said a source at Gazprom Neft.
However, lackluster buying interest for oil in the Russian domestic market this last month has also raised concerns regarding the effectiveness of the platform, as few bids have materialized. "Bids are very scarce now, it is much easier to sell product directly to the specific consumer," the source said. The company will nevertheless continue to use the platform as a mechanism for awarding tenders in the near future amid gloomy demand.
Gazprom Neft's September launch of electronic oil product sales was aimed at selling 250,000 mt of products via the platform by the end of the year. At the time, Gazprom Neft said the platform's transparency would allow it to conduct sales in real-time, raising the effectiveness of sales. In addition, the electronic trade, Gazprom Neft said, would allow it to form market prices of oil products, which could serve as indicators for other, market participants.
The company announced a sell-tender Tuesday via an emailed tender notification letter to market participants to sell remaining volumes of diesel and HSFO for December deliveries. "This tender is for rather small volumes, so we decided to test whether the previous system is still working," said a source at Gazprom Neft.
However, lackluster buying interest for oil in the Russian domestic market this last month has also raised concerns regarding the effectiveness of the platform, as few bids have materialized. "Bids are very scarce now, it is much easier to sell product directly to the specific consumer," the source said. The company will nevertheless continue to use the platform as a mechanism for awarding tenders in the near future amid gloomy demand.
Gazprom Neft's September launch of electronic oil product sales was aimed at selling 250,000 mt of products via the platform by the end of the year. At the time, Gazprom Neft said the platform's transparency would allow it to conduct sales in real-time, raising the effectiveness of sales. In addition, the electronic trade, Gazprom Neft said, would allow it to form market prices of oil products, which could serve as indicators for other, market participants.
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