Asia’s middle distillates markets were heavily discussed as physical trading activity on the open window took place and more refiners came out with both August and September cargo offers.
SK Energy was still offering prompt August spot cargoes, while Taiwan’s Formosa Petchem kickstarted their September sales activity.
Meanwhile, some analysts were positive on their forward outlooks going into September, given that east-west flows could pick up and alleviate the regional supply glut in August. This in turn could cap overall market weakness soon.
Refining margins clawed back earlier losses and rebounded to a three-session high of around $17.30 a barrel, reflecting gains in the ICE gasoil markets as well.
Cash differentials fell to slightly more than a two-week low, as lower-priced selling interest finally emerged – though demand remained from Trafigura for August parcels.
So far, the trading powerhouse has bought around 600,000 barrels of August shipments.
Meanwhile, on the jet fuel front, one of China’s key spot sellers continued their August sales, slightly out of expectations, given that it was quite late to still be offering prompt cargoes.
On the window, spot discounts fell to a one-week low after Gunvor sold off an August cargo at minus 60 cents per barrel.
Regrade was little changed from the previous session at a discount of 90 cents per barrel.
SINGAPORE CASH DEALS
– One gasoil deal, one jet fuel deal.
INVENTORIES
– U.S. crude oil and gasoline inventories fell sharply last week on strong export demand, data from the Energy Information Administration showed on Wednesday.
– Singapore’s middle distillates stockpiles rose to a three-month high despite rising net exports of both diesel/gasoil and jet fuel/kerosene, while diesel/gasoil imports from India and the Middle East continued, official data showed on Thursday.
REFINERY NEWS
– Motiva Enterprises was continuing repairs to the shut gasoline-producing fluidic catalytic cracker (FCC) at its 626,000 barrel-per-day (bpd) Port Arthur, Texas refinery on Wednesday, people familiar with plant operations said.
NEWS
– Top oil exporter Saudi Arabia may raise prices for crude it sells to Asia for the first time in three months in September, tracking a rise in Middle East benchmark Dubai, traders said on Thursday.
– Shell SHEL.L reported second-quarter profit of $6.3 billion, a drop of 19% from the previous three months, as refining margins and oil and gas trading weakened, though still beating analysts’ forecasts.
– OPEC+ key ministers meet on Thursday to decide output policy with sources expecting it is unlikely to make any changes to its current deal to cut production and to start unwinding some cuts from October, despite recent sharp declines in oil prices.
Source: Reuters (Reporting by Trixie Yap)