Asia’s 10-ppm sulphur gasoil margins rebounded for the first time in three days to $24.07 per barrel as some trader-based buying interest re-emerged after the market touched near a one-year low.
A quicker pace of drop in oil futures in the afternoon trading session contributed to the stronger 10 ppm sulphur gasoil cracks.
Weak fundamentals, however, limited overall gains. There was sufficient supply in Asia as evident from the various tenders to sell March-loading material – even though China’s export volumes are slated to fall, according to estimates from industry sources.
Organic demand remained lacklustre, one Singapore-based trader said.
Cash differentials rose as much as $1.26 per barrel, reflecting the increase in buying interest for some March-loading parcels.
Jet fuel refining margins rose by a slower pace on the back of weaker demand-supply fundamentals and a closed arbitrage for Asian exports to the United States.
Demand from the heating sector has also slowed evidently from Japan, given that buyers have switched to sellers for March parcels since a week earlier.
The market has already priced in the recovery in China’s domestic air travel earlier, a separate trader said.
Regrade widened to a discount of $2.28 a barrel.
SINGAPORE CASH DEALS
No gasoil deal, one jet fuel deal.
TENDERS
SK Energy sells end-March jet fuel from Incheon
Hyundai Oilbank offers end-March gasoil
Malaysia’s PETCO offers early March gasoil
INVENTORIES
U.S. crude oil inventories likely increased last week, while product stockpiles were expected to have fallen, a preliminary Reuters poll showed on Tuesday. Distillate inventories, which include diesel and heating oil, were expected to have decreased by about 1 million barrels last week.
Middle distillate inventories were at a three-week high of 1.864 million barrels at Fujairah Oil Industry Zone for the week ended Feb. 20, according to industry information service S&P Global Commodity Insights.
NEWS
Oil prices fell for a third trading session on Wednesday on expectations the U.S. Federal Reserve will indicate later in the day that interest rates are set to rise more, stoking concerns of lower global economic growth and demand for fuel.
Russia has ramped up its light oil products exports via Mediterranean ship-to-ship (STS) transfers in February after an embargo shut off access to European markets, data from traders and Refinitiv showed.
China’s Sinopec Corp. said on Wednesday it has completed trial runs at a one million tonnes-per-year ethylene plant in the southern Chinese province of Hainan that will boost exports.
Source: Reuters