Open-spec naphtha was notionally assessed at $172.50/$174.50 per tonne for second-half August.

Backwardation with first-half September was believed to be about 50 cents.

Industry sources close to the negotiations said Japanese buyers were still locked in term talks for naphtha with both Abu Dhabi National Oil Co (ADNOC) for the year starting in July, and South Korea's Ssangyong Oil Refining Co for the July to December period.

In the low sulphur waxy residue (LSWR) market, South Korea's Hyundai Oil Refinery Co is expected to soon make an official award for its tender to buy 200,000 barrels of cracked LSWR for July 20-22 delivery at Daesan.

The tender, which closed on Friday, is valid until 0900 GMT on Monday. Industry sources said the best offer was made at a premium of about $1.40 per barrelover the Pertamina formula.

The level is considerably lower than Hyundai's last award which was made at a premium of about $1.60.

The decline in the premium underscored many traders' view that the LSWR market was quite weak because of an absence of firm demand.

Indonesia's July LSWR allocation, which is expected to be announced later this week or next week, is expected to amount to about three million barrels.

Traders said an allocation of that volume was likely to be difficult to consume in the current market.

``There will be oversupply even if the allocation (were only about) 2.5 million barrels,'' one trader said.

He said demand from Japan was weak, with electric power companies showing little interest in making purchases.

The use of air conditioners during the summer months means many Japanese utilities often hit peak demand between July and September, a factor which potentially lends support to the LSWR market.

The LSWR trader said, however, that Japanese electric power companies have sofar been showing little appetite.

There was no word yet on the result of Indian industrial group Tata's tender to buy eight 200,000-barrel cargoes of LSWR for delivery into Bombay between August and October.

The tender is valid until Wednesday.