Asia’s middle distillates markets turned more upbeat against a backdrop of strong futures performance and more paper swaps buying interest emerging, though physical cargo discussions failed to take flight.

Paper swaps turned into a backwardated structure at some points in the afternoon trading session, with prompt October prices trading higher than November prices – signalling the regaining of some market confidence.

The market shape for ICE gasoil futures is still backwardated so Asian markets probably have to follow to a certain extent, one trade source said, adding that more sellers for October may come out soon.

Refiner offers were scant given the volatile price movements in the afternoon trading session, but more are expected in the next few days.

Refining margins were little changed from the previous trading session at around $12 a barrel.

Spot cash discounts were little changed from the previous session amid a wide buy-sell gap and overall limited discussions in the open trading window.

Regrade declined back to a discount of 12 cents a barrel, reflecting the strength in ICE gasoil futures for October and the prevailing market shape.

SINGAPORE CASH DEALS

– No deals for both fuels.

INVENTORIES

– U.S. crude oil stockpiles dipped to their lowest level in a year last week, while fuel inventories rose, the Energy Information Administration (EIA) said on Wednesday.

– Singapore’s middle distillates inventories fell for a third straight week, tracking the strength in gasoil/diesel net exports, official data showed on Thursday.

REFINERY NEWS

– Russia’s ability to produce diesel and gasoline is expected to fall sharply in September as seasonal maintenance at oil refineries peaks, Reuters calculations based on industry sources’ data showed on Wednesday.

NEWS

– Indian refiners are using Russian insurance cover for Russian oil cargoes priced above $60 per barrel, a government source told Reuters on Thursday.

– Dutch lender ING is further restricting access to finance for some oil and gas companies and from 2026 could drop clients that fail to align with its plans to be net zero, the bank’s chief executive told Reuters.

– Oil prices rose on Thursday after a large interest rate cut from the U.S. Federal Reserve, but Brent was still hovering around its lowest levels of the year, below $75, on expectations of weaker global demand.

– Saudi Arabia’s crude oil exports in July fell to their lowest level in nearly a year, data from the Joint Organizations Data Initiative (JODI) showed on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Janane Venkatraman)