Asia’s middle distillates markets rose on Tuesday despite a lack of spot physical market liquidity and a buy-sell gap, with paper swap movements reflecting a knee jerk reaction to prior session gains in crude futures.
Spot activity also slowed down slightly on the tenders front for February cargoes as major refiners had cleared their sales in the past week.
Overall, South Korean refiners sold at least 13 spot cargoes of 10ppm sulphur gasoil and at least 2 spot 500ppm sulphur gasoil cargoes all for February loading so far, Reuters records showed. This compares with around 12 cargoes of 10ppm sulphur gasoil and 1 spot 500ppm sulphur gasoil cargo for January.
Some concerns of tightening supplies in March and April due to refinery maintenance plans could have limited overall market movements, one trading source said.
Refining margins clawed back losses in the previous session and rose to slightly above $23 a barrel, while February cash differentials climbed 3 cents and firmed back above the $2 a barrel mark, reflecting the steeper swaps backwardation despite a lack of discussions.
Jet fuel refining margins likewise climbed, but at a slower pace of 1% day on day.
Major South Korea-based refiners likely sold 1-2 more spot lots for the aviation fuel in February compared with January, Reuters tender records showed.
Offers also emerged from China-based refiner, with at least one 40,000-metric ton cargo available loading from Dalian – in line with earlier expectations that majors will continue jet fuel exports on lucrative export margins.
Regrade widened to a near three-month high discount of $1.60 a barrel, reflecting the weakness in jet fuel fundamentals and ready supply availability.
SINGAPORE CASH DEALS
– No deals for both fuels.
INVENTORIES
– U.S. crude oil and distillate stockpiles were expected to drop last week, while gasoline inventories were seen up, a preliminary Reuters poll showed on Monday.
REFINERY NEWS REF/OUT
– Water supply was restored to TotalEnergies’ 238,000 barrel-per-day (bpd) Port Arthur oil refinery in Texas, that has been shut for nearly a week, people familiar with the plant operations said on Monday.
NEWS
– UAE’s Abu Dhabi National Oil Company has sold more straight-run fuel oil (SRFO) from its Ruwais refinery complex this month via private sales, according to trade sources and ship-tracking data.
– Oil prices were little changed on Tuesday as traders weighed a host of conflicting supply and demand worries, from rising tensions in the Middle East to cold weather woes disrupting production in the United States.
– Russian energy company Novatek is likely to resume large-scale operations at its Ust-Luga processing complex and Baltic Sea terminal within weeks, following a suspected drone attack seen disrupting naphtha flows to Asia, analysts said on Monday.
– Saudi Arabia’s crude oil exports in November climbed to their highest level in five months and marked a third straight rise, data from the Joint Organizations Data Initiative (JODI) showed on Monday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shailesh Kuber)