Bahrain Petroleum Company (Bapco) has re-negotiated premiums for April to December 2013 gasoil term contracts with up to nine companies at rates about 13 per cent below those of the first quarter, industry sources said.

The company negotiated undisclosed volumes to sell gasoil with 500 parts-per-million (ppm) sulphur at a premium of about $2.60 a barrel above Middle East quotes, they added.

While a few companies may have dropped out of the term contract, the majority of the companies remain the same, a Gulf-based trader said on Tuesday.

"Some companies requested for decreased quantities of gasoil from April (compared with the first quarter), but largely the companies remain the same," a second source said.

Term buyers include Galana Oil, Swiss Singapore, Independent Petroleum Group and Emirates National Oil Company, a third trader said, though this could not immediately be verified.

The premium for the March to December period is about 40 cents cheaper than the January to March premium negotiated with buyers late last year, reflecting weaker sentiment for the power generation fuel in the Gulf, traders said.

"The demand in Europe is very weak right now, so the arbitrage to send cargoes west is not workable and the Middle East is oversupplied at the moment," one trader said.

Bapco clinched deals with several buyers for the 500 ppm sulphur gasoil term contracts for the first quarter of 2013 at a premium of $3 a barrel to Middle East quotes, while reserving the option to re-negotiate term premiums after the first quarter.

Traders have said the premium for the first quarter was unusually high and had expected the levels to be lower from April.-Reuters