Asia’s middle distillates markets were volatile through the day on Thursday, despite slightly slowing activity in the open spot market, with a portion of the paper discussion entering into a contango price structure for a short spurt in the late afternoon.
“Even if the market turned contango, it will still be hard to send cargoes West as the West price structure has to be the same,” one trade source said.
The market however saw more spot sale tenders emerging, in line with earlier expectations, as refiners went about with their regular sale activities.
Spot cash differentials were little changed, maintaining at slightly more than 40 cents a barrel discount, as buyers for April cargoes returned back to the market and limited lower-priced sellers prevailed.
Refining margins for the fuel fell back to slightly more than an eight-month low of around $19 a barrel, as a reflection of the dip in paper values.
Meanwhile, spot jet fuel market activity ticked up as South Korean oil majors emerged with more lots for sale.
There is a possibility for refiners there to still consider maintaining their jet fuel yields higher compared with gasoil even for March since the physical price spread for 500ppm sulphur gasoil-jet fuel is quite flat, one source said.
Regrade was supported given the weakness in gasoil paper prices in the afternoon.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– U.S. crude oil stockpiles fell unexpectedly last week as exports rose and refiners continued to increase activity, while gasoline inventories decreased more than expected, the Energy Information Administration (EIA) said on Wednesday.
– Singapore’s middle distillates inventories slipped by 4% from last week as net exports of diesel/gasoil and jet fuel/kerosene surged, official data showed on Thursday.
NEWS
– Russian Energy Minister Nikolai Shulginov said on Wednesday that the government and companies are in discussions about changes to the schedule of maintenance at oil refineries to tackle damaged downstream capacity, TASS news agency reported.
– South Korean diesel shipments to Singapore for March are on track to hit 2-1/2-year highs, with cargoes likely to be stored temporarily or blended in Asia’s oil hub in a rare move as traders struggle to find end-users for the fuel, analysts and traders said.
– Chinese energy firm CNOOC Ltd posted a 12.6% fall in 2023 net income after a record high a year earlier as hydrocarbon prices fell though a focus on cost control and reserve expansion helped.
– Top South Korean refiners’ spot diesel sale volumes for April are slated to hit a six-month high following the issuance of more tenders after sales last week, according to tender documents seen by Reuters and trade sources on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Mrigank Dhaniwala)
Read the full article here
