Asia’s middle distillates markets recorded a flurry of activity in both the swaps and physical markets on Thursday, despite the east-west arbitrage and demand-supply situation keeping almost steady from the previous trading session.
Buying interest in the physical markets stayed robust as stockpiles in Singapore were at more than one-year low, despite the market’s backwardated price structure weakening slightly from the previous trading session. This was against a backdrop of limited selling interest.
Spot market premiums gained further to $2.15 a barrel as a reflection of how the market played out, as traders were still worried about prompt demand-supply fundamentals – though the situation remained status quo from early week.
However, refining margins were little changed at slightly above $23 a barrel.
The jet fuel market recorded a slight pick up in swaps discussions, but overall cautiousness remained on how fundamentals would pan out – given ample supplies from northeast Asia. Jet fuel refining margins were also almost unchanged at around $22.50 a barrel.
Regrade sellers were readily available in the afternoon trading session.
SINGAPORE CASH DEALS
– One 500ppm sulphur gasoil deal, no jet fuel deal.
INVENTORIES
– U.S. crude oil inventories rose last week, according to market sources citing American Petroleum Institute figures on Wednesday. API/S
– Singapore’s middle distillates stocks dipped for the third consecutive week to hit a more-than-one-year low, of under 7 million barrels, due to robust net exports of gasoil/diesel, official data showed on Thursday.
NEWS
– The International Energy Agency (IEA) on Thursday further raised its 2024 oil demand growth forecast citing an improved economic growth backdrop and lower crude prices in the fourth quarter, although its outlook remains much lower than that of producer group OPEC.
– Middle East oil markets look set for further volatility in 2024, extending heightened volatility last year, the Dubai Mercantile Exchange (DME) said on Thursday, amid producer supply cuts, record U.S. output and the recent Red Sea tensions.
– China’s exports of three major fuel products fell across the board in December from the previous year, customs data showed on Thursday, as export quotas ran low toward the end of the year and domestic fuel demand picked up from a COVID-era slump
– The re-routing of a growing number of ships around Africa to avoid potential attacks in the Red Sea is altering refueling patterns and boosting demand for bunker fuel at far-flung ports, from the Mauritius to South Africa to the Canary Islands.
Source: Reuters (Reporting by Trixie Yap; Editing by Mrigank Dhaniwala)