Asia’s middle distillates markets were volatile through the week with August spot refiner sales remaining upbeat and regional trading sentiment firming slightly, though the east-west price spreads narrowed on Friday.
Meanwhile, the diesel east-west price spreads narrowed to its smallest discount in nearly a month, as Singapore paper and ICE gasoil price trends converged. (LGOAEFSMc1)
Singapore markets are still likely to remain firm in the near-term, given the declining regional stockpiles and lack of swing supply arrivals at least until early August – though some northeast Asian barrels are still expected to arrive here next week, several trade sources said.
On the regional supply front, there is a high likelihood of refinery maximising their diesel output in the past few weeks, given the strength in refining margins since mid-June, multiple trade sources said, which could add on the uncertainty in August supply-demand.
Also reversing course, the 10ppm sulphur gasoil refining margins (GO10SGCKMc1) declined to slightly more than a week’s low of $20.3 a barrel on Friday.
On the trading window, deals again were scant and a buy-sell gap limited overall spot trading momentum. The 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) gained 5 cents from the previous trading session, going a full circle from Monday to close at $1.71 a barrel.
For jet fuel, China oil majors continued their sales activity for this week, with most cargoes sold in discounts for August shipment.
July exports from Asia-Pacific to the Europe region are likely to remain robust given the profitable arbitrage price spread and burgeoning supplies from northeast Asia.
Regrade (JETREG10SGMc1) discounts widened again, back to almost $2.9 a barrel, tracking the increasingly strong Asian gasoil paper markets.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Gasoil stocks held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub, which include diesel, declined 0.5% to 1.75 million tons as exports were steady.
REFINERY NEWS
– U.S. crude oil refiner Valero Energy Corp VLO said on Thursday it plans to operate its 15 refineries up to 94% of their combined total complete throughput capacity of 3.2 million barrels per day (bpd) in the third quarter of 2025.
NEWS
– The United States is preparing to grant new authorizations to key partners of Venezuela’s state-run PDVSA, starting with Chevron, to allow them to operate with limitations in the sanctioned OPEC nation and swap oil, five sources close to the matter said on Thursday.
– Refiner Valero Energy beat Wall Street estimates for second-quarter earnings on Thursday, despite reporting lower profits from the previous year, as a rebound in refining margins helped cushion losses in the renewable diesel segment.
– Rain has sharply raised water levels on the river Rhine in Germany, allowing ships to take on bigger loads and only northern sections of the river are still too shallow for cargo vessels to sail at full capacity, commodity traders said on Friday.
– Oil prices were stable on Friday, as trade talk optimism supported the outlook for both the global economy and oil demand, balancing news of the potential for more oil supply from Venezuela.
Source: Reuters