Asia’s middle distillates markets saw a record number of spot deals on the trading window for the first time this year, as selling pressures heated up with more than 1.2 million barrels being traded, while refiners emerged with more December spot sales.
A total of five deals were done on window for 10ppm sulphur gasoil, with Gunvor being the key seller. Vitol and Ampol were the major buyers during the trading session, with both traders in the market since last week for end-November to early December cargoes.
Sales could be brisk given the influx of swing supplies into Singapore since two weeks earlier for November arrival, amid expectations of rising supplies in northeast Asia soon.
November imports of Middle East and India-origin barrels of diesel/gasoil into Singapore are slated to hit multi-year highs, LSEG shiptracking data showed.
In tenders, South Korea’s GS Caltex kickstarted their December spot sales, offering at least four 300,000-barrel cargoes. SK Energy was also in the market to sell two 300,000-barrel cargoes.
Paper markets however were thinly discussed on window.
Refining margins GO10SGCKMc1 clawed back some losses and rebounded to around $15 a barrel, tracking the slight tick-up in paper markets.
Cash differentials GO10-SIN-DIF slipped by 7 cents, declining as deal levels were lower amid ready selling interest.
Meanwhile, some traders were still puzzled on the strengthening regrade JETREG10SGMc1, though the slight weakness in gasoil fundamentals could be the driver.
The spread shot back up to $1 a barrel, as some near-term buying activities in the paper markets also proved supportive
SINGAPORE CASH DEALS
– Five gasoil deals, two jet fuel deals
NEWS
– U.S. oil refiners this quarter expect to run their plants at above 90% of their crude processing capacity on low inventories and improving demand for gasoline and diesel, executives and industry experts said.
– Oil prices were little changed on Monday as the threat of supply disruptions from a U.S. storm eased and after China’s stimulus plan disappointed investors seeking fuel demand growth in the world’s No. 2 oil consumer.
– U.S. renewable fuel credits rose to multi-month highs on Friday on increased demand from refiners trying to comply with mandates and higher prices for soyoil, surprising traders who expected Donald Trump’s reelection as U.S. president to weigh on the market.
– Saudi Arabia’s crude oil supply to China is set to fall to about 36.5 million barrels in December, trade sources said on Monday, on weak demand from the world’s largest importer.
Source: Reuters (Reporting by Trixie Yap; Editing by Shreya Biswas)