Asia’s middle distillates markets’ trading momentum slowed on the window on Thursday, though July spot refiner discussions hovered at similar discounts from last week and jet fuel markets remain under pressure amid ample supplies.
Derivative markets gained as a knee-jerk reaction to the high possibility of Middle East conflict, though market fundamentals were overall little changed from the previous trading session.
The market’s backwardation structure also eased from before, given the end of the trading cycle for June in the coming days.
July spot 10ppm sulphur gasoil sales continued to be concluded at discounts on a free on board (FOB) northeast Asia basis linked to FOB Singapore quotes.
The 10ppm sulphur gasoil refining margins gained slightly to around $16 a barrel.
On the trading window, activity slowed for the first session in four this week, with a lack of deals.
Cash differentials (GO10-SIN-DIF) declined slightly to 56 cents a barrel, reflecting the narrower backwardation for the swaps market.
Some end-June China-origin jet fuel cargoes were seemingly available for spot sale in the past few trading sessions, with discussions at discounts of more than 50 cents a barrel, several trade sources said.
Jet fuel supplies are still considerably ample given the continuous China-origin exports in the near-term, multiple trade sources said.
Regrade (JETREG10SGMc1) continued to trade at discounts of nearly $1.30 a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– U.S. crude stocks fell last week as refining activity picked up, driving gasoline and distillate inventories higher, the Energy Information Administration (EIA) said on Wednesday.
– Singapore’s middle distillates inventories gained back to more than 10.5 million barrels as net exports of diesel/gasoil dipped week on week, official data showed on Thursday.
NEWS
– The European Union has offered to subsidise airline purchases of more than 200 million litres of sustainable aviation fuels to encourage carriers to swap kerosene for cleaner alternatives, Reuters calculations show.
– Russia’s offline primary oil refining capacity expected in July has been revised up by 21% from the previous plan to 3.2 million metric tons due to adjustments to maintenance plans, according to Reuters calculations based on data from industry sources.
– Foreign energy firms continue operating normally in Iraq, a senior Iraqi official told Reuters on Thursday, after U.S. President Donald Trump said U.S. personnel were being moved out of the Middle East because “it could be a dangerous place”.
– A lower price cap for Russian oil proposed by the European Commission to punish Moscow for its war in Ukraine will not contribute to the stabilisation of global energy markets, Kremlin spokesman Dmitry Peskov said on Wednesday.
Source: Reuters