Asia’s middle distillates markets recorded slightly less upbeat market activity amid mixed signals such as rising ICE gasoil prices, higher stockpiles in Singapore and overall less profitable east-west arbitrage price spreads.
Spot cargoes for April continued to be discussed in discounts of more than $1 a barrel, as major South Korean refiners closed their sale tenders at such levels.
Little change in the east-west arbitrage price spreads limited spot discussions mostly within the region, with freight costs also gaining a fair bit in the two trading sessions in comparison with last week.
Refining margins rebounded by almost $1 a barrel from the previous session, buoyed by stronger performance in the swaps market.
Cash differentials slipped even further to discounts of 28 cents a barrel, reflecting the narrower backwardation. A buy-sell gap hampered further negotiations in the open trading market.
On the jet fuel front, more spot cargoes were made available from China oil majors for April loading, with Rongsheng offering a third spot cargo this week.
Likewise, the gasoil market and the jet fuel east-west arbitrage window remained closed for regional suppliers here following gains in freight costs and limited price spreads between the two regions.
Regrade widened slightly to a discount of around $1.60 a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels.
INVENTORIES
– U.S. distillate stockpiles, which include diesel and heating oil, rose by 888,000 barrels in the week to 117.9 million barrels, versus expectations for a 150,000-barrel drop, data from the Energy Information Administration (EIA) showed on Wednesday.
– Singapore’s middle distillates stockpiles surged by 8% week on week to hit a fresh high since September 2021 as net exports of both diesel/gasoil and jet fuel/kerosene slipped by 98% and 26%, respectively, official data showed on Thursday.
REFINERY NEWS
– Valero Energy Corp VLO.N completed a planned overhaul on the large crude distillation unit (CDU) at its 335,000 barrel-per-day (bpd) Port Arthur, Texas refinery on Tuesday, people familiar with plant operations said on Wednesday.
– A hydrocracker was operating on Wednesday at Marathon Petroleum’s MPC.N 593,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, following a Tuesday night malfunction, said people familiar with plant operations.
NEWS
– Nigeria’s oil production is steadily rising, hitting 1.476 million barrels per day (bpd) in February, the highest in more than three years, OPEC data showed, as the military and private security contractors’crackdown on crude theft and pipeline sabotage.
– With more ships heading around the Cape of Good Hope due to attacks in the Red Sea region and a shutdown in their main South African bunkering operations, Mercuria and Trafigura have started refuelling services in Mauritius, four sources said.
– The settling down of post-pandemic turbulence and a cloudy economic outlook will rein in oildemand growth this year, the International Energy Agency said on Thursday, even as shipping disruptions provide a short-term boost.
– Shell SHEL.L weakened its 2030 carbon reduction target and scrapped a 2035 objective, citing expectations for lower power sales and strong demand for gas in the energy transition even as it affirmed a plan to cut emissions to net zero by 2050.
Source: Reuters (Reporting by Trixie Yap; Editing by Sohini Goswami)
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