Open-spec naphtha was assessed at $118.00-$120.00 per tonne for delivery in the second half of March, compared with $119.00-$121.00 late Tuesday, despite a rebound in the European market on Tuesday.

"I think the market will remain weak through March" unless factors to turn the course around emerge," an official with a trading house said.

The soft open-spec market will be a leverage term buyers will likely use in upcoming negotiations with KPC for term contracts starting March, traders said.

KPC and buyers will meet in Singapore from January 25. Traders had said buyers would naturally aim for the next term at a premium below $6 per tonne over the mean of Middle Eastern quotes which was set for the term year that began in August.

"Now it is not a dream to expect (apremium of) even below $5," said a trader with a Japanese refiner.

While KPC would not accept unreasonably low bids as the country has been suffering from low oil prices, it will likely try to compromise with buyers for fear that its huge supplies fail to find home, traders said.

"When the market is this low and material is amply supplied, one would wonder why you should bother to secure term cargoes paying a high premium," the trading house trader also said.

Under such circumstances, he suggested that a cut in term volume was likely if KPC would insist on only a small reduction in the next term year's premium.

In the domestic kerosene market, a persistent slide in retail prices came to a halt, although it may be premature to call it a trend reversal, according to an industry group.

As of Monday, the National average retail price of kerosene stood at 746 yen per 18-litre container, or 41.4 yen per litre, flat from a week before, the Institute of Energy Economics reported on Wednesday.

It is thefirst time the price slide stopped since May last year, according to the institute's data.

A year ago on January 20, 1998, the retail kerosene average was 856 yen per 18-litre, or 47.6 yen per litre, the institute said.