Asia’s middle distillates market activity kickstarted the week at a slower pace on mixed trading sentiment, amid softening crude futures and almost stable ICE gasoil prices.
However, the pace of spot trading is slated to improve in the next few days. There were heavy expectations of more February spot discussions to emerge soon, as some refiners confirm their crude runs. At least three refiners are likely to kick off spot talks.
Earlier, one Taiwan refiner sold off at least one spot February 10ppm sulphur gasoil cargo at a small discount of 7 cents a barrel.
Spot cash premiums discussed in the open market came under pressure, falling by 3 cents from the previous session, as lower-priced sellers for prompt loading parcels emerged.
Buyers were not aggressive in seeking more prompt shipments, weighing further on cash premiums.
Physical cargo differentials for 500ppm sulphur gasoil surged to nearly a discount of $1.1 a barrel as more buyers emerged again, sparking talks of some regional demand strength in the near-term from southeast Asian buyers. The market has been strengthening since last week, LSEG price data showed.
Refining margins GO10SGCKMc1 climbed by around 1.5% from the previous trading session to close at almost $21.50 a barrel.
Jet fuel refining margins JETSGCKMc1 also climbed in line with gasoil, with news of China local demand likely to surge during the Lunar New Year travel period supporting sentiment slightly.
Gains were capped by overall ample supplies since refiners have been switching to jet fuel production since a month ago due to higher profitability.
Regrade JETREG10SGMc1 was little changed, as evidenced from the lack of trading direction in the jet fuel market.
SINGAPORE CASH DEALS O/AS
– No deals for both fuels.
REFINERY NEWS REF/OUT
– PBF Energy PBF.N plans to shut a crude distillation unit (CDU) next week at its 190,000-barrel-per-day (bpd) Chalmette, Louisiana, refinery, according to two people familiar with the company’s plans.
– Motiva Enterprises MOTIV.UL is scheduled to shut the large crude distillation unit (CDU) and large coker at its 626,000 barrel-per-day (bpd) Port Arthur, Texas, refinery by Monday, people familiar with the company’s plans said on Friday.
NEWS
– The river Rhine in Germany has been reopened to shipping after being halted due to a rise in water levels following rain last week, German authorities said on Monday.
– Top oil exporter Saudi Arabia on Sunday cut the February price of its flagship Arab Light crude to Asian customers to the lowest level in 27 months, a company statement showed, amid competition from rival suppliers and concerns about supply overhang.
– Oil prices fell by more than 1% on Monday on sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output, offsetting worries about escalating geopolitical tension in the Middle East.
Source: Reuters (Reporting by Trixie Yap; Editing by Shinjini Ganguli)