DUBAI/NEW DEHLI (Reuters) - Saudi Aramco has secured a deal to buy 7.4 million barrels of gas oil from Reliance Industries for 2009, as strong demand for power and motor fuels forces it to import, traders said on Monday.
The deal takes the total the kingdom has bought on contract for 2009 to over 10 million barrels. The world's top oil exporter typically avoids longer-term deals as it strives for fuel self-sufficiency. But cheap international prices and growing demand may have convinced Aramco to lock in supplies, trade sources said.
"Under normal circumstances, this would be very unusual, but at a time when prices are in a slump stocking-up makes good business sense," a Middle-East based trader said.
"And the prices they have done the term deals at look good for them in the long run, I'd reckon we would see them less in the spot market this year, unless their requirement continues to expand."
Details were unavailable on the price of the Reliance deal.
Last week Aramco agreed to buy 3 million barrels of gas oil for delivery March through December from Japanese trader Itochu.
Saudi demand for fuel for power generation and transport has risen rapidly over the past six years as record crude exports sparked an economic boom.
But a slump in oil prices since last July has seen the kingdom cut output to its lowest level in more than six years as OPEC races to match supply with falling demand.
Most Saudi gas output is produced with oil so supply has tightened with oil output, leaving less to supply power plants and industry.
Source : REUTERS INDIA