Asia’s middle distillates markets were volatile throughout the week, though prompt supply-demand fundamentals remained supported and discussion levels closed firmer week on week overall.
Diesel-wise, the market continued to see strength in terms of demand expectations even up to December, two trade sources said, adding that some persistent refining run cuts could alsohelp support the tighter balances.
Offers were minimal for the week, but buying interest stayed brisk from several key importers, such as Indonesia. Buying from Iraq also emerged again for the second time in two months.
Jet fuel markets recorded a whirlwind of activity this week, as evidenced by the price volatility and discussion levels throughout the week – though most of it quietened on Friday.
Support largely came from a healthy arbitrage window between Asia and the U.S. West Coast, prompt shortage in China aviation bunkering markets and limited offers for remaining first-half November cargoes.
Demand stayed firm on Friday, with Taiwan’s CPC Corp also seeking jet fuel deliveries into first-half December.
Traders, however, were monitoring the second-half November and December situation closely to see if jet fuel supply can tick up from swing sellers in the Middle East and India, with at least three long-range vessels bound for this region at the moment that could offset the prompt demand requirements.
Refining margins closed the trading session at almost $16 a barrel, hanging on at three-month high levels.
The 10ppm sulphur spot premiums for mostly November cargoes surged to above $1 a barrel as demand on the trading window resurfaced and bids climbed to mostly above $1 a barrel for November cargoes.
A general lack of offers also buoyed the spot market discussions, as a deeper backwardation on a swaps basis provided supported. Deals, however, ended up being scant.
Jet fuel spot premiums fell back down as ready offers for November emerged from one major western trader, with bid levels waning slightly from the past few trading sessions.
Regrade on Friday rebounded to 80 cents a barrel but was little changed from last week.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by 5.5% in the week to Thursday, data from Dutch consultancy Insights Global showed.
REFINERY NEWS
– Rosneft will resume operations at its oil refinery at the Black Sea port of Tuapse in November, three industry sources told Reuters.
NEWS
– Russia’s exports of ultra low-sulphur diesel (ULSD) from the Baltic Sea port of Primorsk in November are set to reach 1.1 million metric tons, two traders said on Thursday.
– Top oil exporter Saudi Arabia may cut prices for most of the crude grades it sells to Asia in December, tracking weakness in Middle East benchmark Dubai, trade sources said.
– Oil prices extended gains on Friday, climbing more than $1 a barrel to pare weekly losses after reports Iran was preparing a retaliatory strike on Israel from Iraq in the coming days.
– Freight rates for tankers carrying Russia’s flagship Urals crude from its Baltic ports to India have stalled on expectations of declines in oil exports from Moscow’s western ports in November, trading and shipping sources said.
Source: Reuters (Reporting by Trixie Yap; Editing by Tasim Zahid)