Asia’s middle distillates markets continued the strength from the previous trading session, buoyed by continuous expectations of bottoming out prices with traders remaining hopeful for an improvement in demand-supply fundamentals soon.
There should be fewer spot cargoes from some refiners soon if run rate cuts continue into July, which could improve the earlier supply glut, some Singapore-based trade sources said.
Meanwhile, exports are so far declining from India for May, shiptracking data from LSEG and Kpler showed.
Refining margins for the fuel rose to almost $15 a barrel a reflection of this improving market sentiment and slight bullishness in the paper markets.
Spot market discussions for mostly second-half June cargoes came under slight pressure after more sellers emerged, dipping to discounts of around 20 cents per barrel.
The market saw a lack of buying interest in the open trading market likewise the past two trading sessions this week, signalling that there were still some cautiousness in the market still.
Support, however, still came from stronger paper values overall.
Jet fuel refining margins went up at a quicker pace than gasoil, buoyed by strong buying interest in the paper market that caused the price structure to turned into slight backwardation again.
Spot premiums for aviation fuel surged back to almost a premium of close to 30 cents a barrel as a result.
Regrade narrowed further for the third straight session to a discount of $1.20 a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels.
INVENTORIES
– U.S. crude oil stockpiles were expected to have fallen last week, while distillates and gasoline stocks likely rose, a preliminary Reuters poll showed on Tuesday.
– Middle distillates stockpiles at Fujairah Oil Industry Zone slipped by 438,000 barrels to 3.267 million barrels in the week ended May 27, according to industry information service S&P Global Commodity Insights.
NEWS
– Russia’s exports of ultra low-sulphur diesel (ULSD) from the Baltic Sea port of Primorsk in June are set to fall by 4.4% month on month to 1.36 million metric tons, down from 1.47 million tons scheduled for May, two traders said on Wednesday.
– PetroChina International 0857.HK said it has loaded 100,000 barrels of crude oil from the United Arab Emirates’ offshore block Belbazem, where parent company CNPC has a joint venture with Abu Dhabi National Oil Company (ADNOC).
– India’s crude oil imports in April rose by 7% to 21.44 million metric tons year-on-year, boosted by firm demand and discounted Russian fuel, government data released on Wednesday showed.
Source: Reuters (Reporting by Trixie Yap; Editing by Ravi Prakash Kumar)