Spot demand from Vietnam amid tighter availability of gasoil is expected to boost prices and margins for the fuel, traders said on Monday.

Traders said Vietnam's top fuel importers are seeking 85,000 tonnes of diesel ahead of a planned shutdown of the country's sole 130,000 barrels-per-day refinery at Dung Quat in June that is expected to last 52 days.

Petrolimex is seeking 35,000 tonnes of 500ppm sulphur gasoil for May 18 to 22 loading in a tender that closes on April 25 and is valid until April 26. 

Saigon Petro is seeking five cargoes of 10,000 tonnes each of 500ppm sulphur gasoil for delivery into Catlai over June 1 to 5, June 8 to 12, June 21 to 25, July 1 to 5 and July 10 to 14, they said.

Sales of diesel have been stronger than usual in Vietnam recently, a fuel distributor in Vietnam said, declining to be named as he was not authorised to speak to the media.

Inventory of diesel from Dung Quat refinery is also short as the refinery has been maximising gasoline production over diesel, he added.

India's Bharat Oman Refineries Ltd (BORL) has offered 9,500 tonnes of jet fuel kerosene blendstock for loading from Mumbai over mid-May.

The refiner seldom exports the fuel and the reason for the export was not immediately clear.

Cash premiums for 10ppm sulphur diesel was improving due to limited supply of the fuel and improved arbitrage economics to ship the cargoes west, a Singapore-based trader said.

With the spread between 10ppm sulphur diesel and 500ppm sulphur gasoil having narrowed in recent weeks, traders had been blending the 10ppm sulphur diesel into the 500ppm sulphur gasoil pool, which has tightened its supply, the trader added.

"Arbitrage is also looking better to the west," the trader said.

Winson Oil bought 150,000 barrels of 500ppm sulphur gasoil for May 16 to 20 loading from Gunvor at a premium of 50 cents a barrel to the average of May 15 to 19 Singapore quotes.