Asia’s middle distillates markets were upbeat and price structures were still finding some form of support from supply disruptions regionally, while traders awaited more November spot sale tenders from northeast Asia.
Support will still be found from tightened supplies, given regional refinery outages in the near term, amid ongoing scheduled maintenance activities, one trade source said.
At least one more southeast Asian refiner was heard to be having woes at its production units, with two others already having issues since the past two weeks.
Paper markets will remain in a backwardation structure until December as a result, a second source said.
Traders are also looking at offers emerging soon from northeast Asia’s key refiners in the next few trading sessions, especially for jet fuel sales from China, which could point to further clues on the supply balance for November.
Refining margins GO10SGCKMc1 gained for a third consecutive session to close at slightly above $14.1 a barrel, albeit with weakness in the paper markets.
Spot market premiums were little changed at discounts of 23 cents a barrel, reflecting of the lower-priced sellers in the open trading window.
For jet fuel, activity on the open trading window turned slightly brisk, with deals done after a one-week lull.
Regrade jumped back to a discount of 7 cents per barrel, reflecting the weakness in gasoil markets in comparison.
SINGAPORE CASH DEALS
– Two 10ppm gasoil deals, One jet fuel deal
INVENTORIES
– U.S. crude oil stockpiles were expected to have risen last week, while distillate and gasoline inventories likely fell, a preliminary Reuters poll showed on Monday.
NEWS
– A top palm oil industry analyst on Tuesday said Indonesia’s plan for the widespread use of the palm-oil-based B40 biodiesel from next year would be “catastrophic” for the global market, as it would involve the additional use of 1.5 to 1.7 million metric tons of the commodity.
– Turkey and Brazil have been the main importers of Russian seaborne diesel and gasoil since the European Union banned the import of Russian oil products, data from market sources and finance company LSEG showed.
– India’s fuel consumption in September fell by 1.6% year-on-year to 17.92 million metric tons, its lowest in two years, oil ministry data showed on Monday, as above-normal monsoon rains continued to weigh on diesel demand.
– A rally in oil prices took a break on Tuesday as the market waits for Israel’s response to last week’s Iranian rocket attacks that triggered a price surge on concerns of a broader conflict in the Middle East.
Source: Reuters (Reporting by Trixie Yap; Editing by Tasim Zahid)