Asia’s middle distillates markets saw more activity on the physical cargo front with a jet fuel deal emerging for the first time in a month and some refiners coming out to start February spot sales.
Some price support came from the West, with some parts of the United States facing ongoing winter storms – though refinery production disruptions have yet to emerge.
Gains in the ICE gasoil futures markets mostly tracked firmness in crude prices for the past two consecutive trading sessions.
However, the limited market fluctuations these two weeks remain a key deterrent for more spot activity, given that it could be hard for traders to take a definitive position, one market source said.
The market is mostly tracking crude fluctuations in the near term amid a lack of fundamental changes, one refinery source said.
Refining margins GO10SGCKMc1 hit almost a three-week high, nearing $22.50 a barrel.
Spot cash premiums GO10-SIN-DIF for end-January and February loading parcels slipped further for the second straight session as some aggressive sellers remained present. Vitol continued to be the biggest buyer for both fuels.
Jet fuel refining margins JETSGCKMc1 also climbed but by a smaller margin amid a lack of paper swaps market activity, though a portion of the market remained bullish – as evidenced from the deal done in the open trading market.
Regrade JETREG10SGMc1 widened slightly to a discount of 55 cents a barrel, reflecting again the strength in gasoil futures.
SINGAPORE CASH DEALS O/AS
-One gasoil deal, one jet fuel deal.
INVENTORIES
– U.S. crude oil inventories fell last week, while fuel inventories rose, according to market sources citing American Petroleum Institute figures on Tuesday. API/S
– Middle distillates stockpiles climbed to a near one-month high of 2.797 million barrels at Fujairah Oil Industry Zone for the week ended Jan. 8, according to industry information service S&P Global Commodity Insights.
NEWS
– A massive winter storm moving across the eastern half of the U.S. on Tuesday knocked out power to about 811,000 homes and businesses in 12 states ahead of a brutal freeze expected to blanket the region starting this weekend.
– Oil rose for a second day on Wednesday after an industry report showed a bigger-than-expected drawdown of crude inventories in the United States, the world’s biggest oil consumer, that bolstered demand sentiment.
– The economic incentive to import oil from the U.S. Gulf Coast to Asia has closed as the cost of booking supertankers on the route has surged amid a jump in bookings for the vessels, traders said this week.
Source: Reuters (Reporting by Trixie Yap; Editing by Devika Syamnath)