Asia’s middle distillates markets were little changed as thin spot discussions for physical cargoes persisted, though physical deals emerged for the first time in a week.
Traders are expecting contractual discussions for 2024 to kickstart soon, and this could limit overall spot trading liquidity in the coming weeks.
A lack of fluctuations in the last two weeks could also be due to majority of the market having the same short-term outlook on this region’s demand-supply balance, one trader said.
China’s majors adjusted their November loading diesel exports slightly from 710,000 metric tons to 750,000 tons, several traders and consultancies from the country said, adding that it could be due to better export margins.
Inventories in local China were higher than expected as refiners were running their crude and secondary units high after maintenance, and to cash in on expectations of strong local demand, two traders said.
Refining margins GO10SGCKMc1 for 10 ppm sulphur gasoil closed the session slightly above $24.50 a barrel.
Spot cash premiums GO10-SIN-DIF rose by 5 cents to $1.50 a barrel.
Jet fuel refining margins JETSGCKMc1 climbed at a quicker pace, with regrade JETREG10SGMc1 narrowing to around a discount of $1.68 a barrel. The market was supported by November buying interest throughout.
SINGAPORE CASH DEALS O/AS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– Crude stocks rose by about 1.3 million barrels in the week ended Oct. 27, according to market sources citing American Petroleum Institute figures on Tuesday. Gasoline inventories dropped by about 360,000 barrels, while distillate inventories fell by about 2.5 million barrels, the sources said on condition of anonymity.
NEWS
– China’s factory activity unexpectedly contracted in October, two surveys showed this week, renewing concerns over the state of the country’s sprawling manufacturing sector and its fragile economic recovery at the start of the fourth quarter.
– Top oil exporter Saudi Arabia may keep the price for its flagship Arab Light crude little changed to Asia after five months of price hikes, as the market, rattled by geopolitical tensions, juggles supply uncertainty with declining demand.
– Discounts on Russian oil sales have reduced from levels seen in June quarter, said Vivek C Tongaonkar, head of finance at Indian refiner Managlore Refinery and Petrochemicals Ltd MRPL.NS.
Source: Reuters (Reporting by Trixie Yap; Editing by Varun H K)