Asia’s middle distillates markets softened again, with activity still weighed on by weaker futures prices and overall ample supply worries for April.
Downside pressures were further exacerbated by a narrower east-west arbitrage spread amid higher freight costs and also softer exchange of futures for swaps (EFS) values at the close of the trading session.
Paper market activity was overall upbeat in the afternoon trading market.
Refining margins GO10SGCKMc1 sank back into eight-month lows of slightly below $20 a barrel.
Cash differentials GO10-SIN-DIF likewise fell further to discounts of more than 25 cents a barrel, despite a serious buy-sell gap in the market.
Physical spot price spreads for 10ppm sulphur gasoil and 500ppm sulphur gasoil narrowed to below $1 a barrel for the first time in the past three months.
In the jet fuel market, activity picked up as some northeast Asian oil majors kickstarted their April discussions. Supplies for April could still remain ample given the strength in jet fuel price spreads to gasoil, one source said.
Arbitrage spreads to northwest Europe weakened slightly compared with the past few sessions.
Regrade JETREG10SGMc1 remained at discounts of below $1.40 a barrel.
SINGAPORE CASH DEALS O/AS
– No deals for both fuels
INVENTORIES
– U.S. crude oil inventories and fuel inventories fell last week, according to market sources citing American Petroleum Institute figures on Tuesday. API/S
– Middle distillates stocks in Fujairah Oil Industry Zone slipped for the fourth straight week to 1.5 million barrels during the week ended March 11. FUJAIRAH/
NEWS
– Oil producer group OPEC said on Wednesday it was encouraged by a commentary from the International Energy Agency (IEA) which underscores the importance of oil security, while the two remain far apart on the demand outlook.
– South Korean authorities are investigating imports of naphtha, a petrochemical feedstock, looking into whether supply from Russia was being mislabelled as fuel from elsewhere, multiple sources familiar with the matter said.
– Russian tanker Krymsk, hit by sanctions, docked on Wednesday at the Chinese port of Dongying in eastern Shandong province, home of independent refiners, to discharge 700,000 barrels of Russian Sokol crude, LSEG and Kpler shipping data showed.
Source: Reuters (Reporting by Trixie Yap; Editing by Shailesh Kuber)
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