Asia’s diesel markets were still thinly discussed on the trading window despite slightly firmer paper price structures, though jet fuel spot activity did tick up slightly on worries of ample supplies for October.
The diesel front-month east west price spread was still trading slightly above discounts of $45 per metric ton, with September ICE gasoil futures to expire two days later. October east-west spreads were $1-$2 per ton higher than September.
Freight costs on the northeast Asia-Europe route for a 90,000 metric ton vessel remained at $4.2-4.25 million, equivalent to $46-47 per ton. Arbitrage flows could still be tough from northeast Asia to Europe for diesel, some traders say.
Meanwhile, some spot first-half October South Korea-origin barrels sold late last week were mostly done at slight premiums to free on board (FOB) Korea quotes.
Refining margins (GO10SGCKMc1) eased slightly to $19.7 a barrel, but remained firm at its highest since end-July.
The 10ppm sulphur gasoil physical markets were lack of deal for a second straight session, with cash differentials (GO10-SIN-DIF) rebounding slightly to 90 cents per barrel following a firmer paper market structure.
Selling of jet fuel on the trading window stayed brisk, with talks of China’s oil majors starting to offer October-loading cargoes.
Regrade (JETREG10SGMc1) was still trading at discounts of around $1.9 a barrel.
SINGAPORE CASH DEALS
– No gasoil deal, one jet fuel deal.
INVENTORIES
– U.S. crude oil and distillate stockpiles were expected to have fallen while gasoline inventories likely rose, a preliminary Reuters poll showed on Monday.
REFINERY NEWS
– India’s HPCL-Mittal Energy Ltd (HMEL) will raise the capacity of its Bathinda oil refinery in northern Punjab to 236,000 barrels per day by December from the current 226,000 bpd, a company official said on Tuesday.
NEWS
– Saudi Arabia, the world’s top oil exporter, cut the official selling price for the Arab Light crude it sells to Asia a day after OPEC+ producers agreed to raise output.
– There is a high risk of oil prices falling because of a small increase in demand and higher OPEC+ production, an executive of shipping firm Maersk told the APPEC conference in Singapore on Tuesday.
– India’s fuel demand rose 2.6% in Aug compared with the same month last year.
Source: Reuters