Asia’s middle distillates refining margins firmed to a more than three-month high of above $26 a barrel, reflecting the support from ICE gasoil futures, despite cautious buy-sell interest in the physical markets.
There could be a bout of shortcovering demand in the futures market in the prompt months and some rollover in trading positions to March that is supporting the futures market as well, one source said.
Markets still awaited fresh buy-sell tender activities from regional players, though the emergence of March sale tenders from the Middle East came unexpected as it was still early.
Earlier worries about slightly tightening regional supplies eased slightly after major refiner SK Energy announced that there would be minimal maintenance plans at its Ulsan or Incheon refineries in the first quarter this year during an earnings briefing.
Regional freight costs for northeast and southeast Asia routes slipped for the first time, mitigating some prevailing concerns that this could eat into March seller discounts.
Spot market premiums for second-half February to early March loading cargoes were little changed as a buy-sell gap remained a key hindrance. Physical deals were absent from the trading window for a second straight session, though some lower-priced selling interest did emerge from a key trader.
Jet fuel refining margins likewise gained slightly more than 7% from the previous trading session.
Traders were awaiting more offers to emerge soon from northeast Asian refiners for March-loading cargoes.
Regrade widened slightly to a discount of more than $2.70 a barrel, as a reflection of the mostly unchanged market fundamentals.
SINGAPORE CASH DEALS
– No deals for both fuels.
INVENTORIES
– Analysts polled by Reuters estimated stockpiles of gasoline were up by about 500,000 barrels last week, while distillate stockpiles, which include diesel and heating oil, were seen decreasing by about 1.2 million barrels.
REFINERY NEWS
– India’s MPRL plans a three-week long maintenance shutdown of a 6 million metric ton per year crude unit and some secondary units during July to September, Managing Director Sanjay Varma said on Tuesday.
– India’s Bharat Petroleum Corp plans to shut a 4.5 million metric ton-per-year (90,000 barrels per day) crude unit and some secondary units for 30 days at its Kochi refinery during September-October, a company executive said on Tuesday.
– TotalEnergies restarted all but one production unit of its 238,000 barrel-per-day (bpd) Port Arthur, Texas refinery on Sunday, people familiar with plant operations said on Monday.
– BP Plc was continuing assessments on Monday of production units at its 435,000 barrel-per-day (bpd) Whiting, Indiana, refinery following a plant-wide power outage on Thursday, said people familiar with the matter.
NEWS
– Top oil exporter Saudi Arabia unexpectedly kept March price of its flagship Arab Light crude to Asia unchanged at a more than two-year low, an Aramco statement showed on Tuesday, as the OPEC leader strives to maintain its market share.
– As many as 35 oil tankers that usually carry crude or fuel oil could switch to carrying cleaner products like diesel and jet fuel in the next two months as shipowners chase higher profitability, oil analytics firm Kpler said in a LinkedIn post.
– South Korean energy group SK Innovation 096770.KS, on Tuesday forecast slowing growth in global electric vehicle (EV) demand, joining an increasing number of automakers and suppliers expressing concern about the market for EVs.
Source: Reuters (Reporting by Trixie Yap; Editing by Shweta Agarwal)