However, inflows from India to East Asia for the same month rose by 50 percent to 300,000-350,000 tonnes, drawn by tighter supplies for the month.

"Fundamentals are tighter next month mainly due to less Iranian barrels flowing in, with most of the other factors being similar to this month," a Singapore-based Asian trader said.

"The Western volumes are similarly thin, at below 3 million tonnes, and demand is still strong from unusual buyers such as Bangladesh and Malaysia."

Reflecting the stronger July market, Indian refiners Essar Oil and Indian Oil Corp (IOC) both sold end-July parcels at steady-to-higher prices.

IOC sold up to 35,000 tonnes of 380-centistoke (cst) for July 24-26 loading from Chennai to BP at a discount of $9.00-$10.00 a tonne to Singapore spot quotes on a free-on-board (FOB) basis, steady to the previous deal for an early-June parcel.

Essar sold 60,000 tonnes of 380-centistoke (cst) for July 24-28 lifting from Vadinar to Matrix-Mabanaft at a premium of $9.00-$10.00 a tonne to Middle East spot quotes, FOB, up from $8.00-$9.00.

The BP parcel is expected to be delivered to Singapore while the Matrix one is expected to go to the Middle East.

There is another outstanding tender for 15,000 tonnes of 180-cst, offered by IOC, for July 25-27 lifting from Haldia, which closed Thursday, with a one-day validity.

BP has won all the tenders for cargoes from Haldia, for June- and July-loading, so far, at discounts of $21.00-$25.00 a tonne to Singapore spot quotes, FOB, with the latest parcel transacted at the higher end of the price range.

The July market is strong due to lower Iranian volumes, estimated at about 750,000-800,000 tonnes so far, down from a record of 1.2 million tonnes for June.

July Western arbitrage flows are expected to be at less than 3 million tonnes and steady to June's 16-month low volumes of around 2.8-2.9 million tonnes.

Still, the upside is limited by 26-month high Saudi volumes at 450,000-500,000 tonnes for July, which is getting mitigated by continued demand from unexpected buyers.

Bangladesh is seeking up to 700,000 tonnes for second-half 2011 delivery and Malaysia has bought more than 200,000 tonnes for delivery between April and August.

Copyright Reuters, 2011