Indonesian state oil monopoly Pertamina has yet to allocate cargoes for lifting in November, but talk was rife that November's volume would be between 2.6 and 2.9 million barrels, lower than October's 3.38 million barrels, they said.

Pertamina was expected to announce the November allocation this week, they added.

Traders said the lower projected volume was due to Indonesian refineries' use of lighter crudes, which do not have high LSWR yield.

A scheduled maintenance shutdown of the 85,000-barrel-per-day Dubai refinery in mid-November for a month would also effectively reduce the supply, traders said.

"The market is going to be tight this time round. As it is now, some sellers are already eyeing higher premiums," a trader said.

A few LSWR suppliers were widely said to be testing premiums of around 70-80 cents to the Pertamina formula for November,compared with the last deal done at 30-40 cents for October, traders said.

On the demand side, however, Japanese endusers were not likely to lift over and above their normal requirements for November, traders said.

"It's the off-peak demand season for that part of the world," said a trader. "I believe Japan is quite comfortable with their inventory levels now." Traders estimate that between 800,000 and one million barrels may be absorbed by Japan for November, compared with the norm of 2.0-2.5 million barrels purchased during peak demand season.

Japanese demand typically was not expected to pick up vigorously until late November when the winter starts looming, traders said.

LSWR is used as feedstock for power generation in Japan.

There was no sight of demand from the United States yet as current economics could not justify cargoes being shipped there, traders said.

"But US refiners are expected to start buying again, even more strongly, towards the latter half of November ahead of the winterseason," a trader said.