Asia’s middle distillates kicked off the week at a slightly slower pace as some participants retreated to the sidelines to await for more July offers – if any – from refiners who have yet to finish their sales, with China’s July export estimates little changed month on month.
China’s key oil majors are likely to export 600,000-700,000 metric tons of diesel and 1.9 million tons of jet fuel for July, several industry sources said on Monday. June export volume estimates for the two fuels were earlier at 700,000 tons and 2 million tons, respectively.
There are still expectations for some sellers to make some adjustments to these volumes, given the strength in export margins in the recent two weeks, one China-based trade source said.
For July so far, South Korean refiners SK Energy and GS Caltex have sold a total of 12-13 spot cargoes, after offering up to 14-15 cargoes. This compared with a total of 15 cargoes sold for June.
Meanwhile, on the Taiwan export front, the major key refiners there sold up to 2.1 million barrels for end-June to July loading, compared with slightly more than 1.1 million barrels in June.
Refining margins GO10SGCKMc1 dipped below $16 a barrel for the first time in eight sessions, tracking the weaker market structure and declines in ICE gasoil futures.
Cash differentials GO10-SIN-DIF barely moved, a reflection of the buy-sell gap in the spot trading window.
Jet fuel sellers in the open trading market continued to aggressively provide lower-priced offers for July spot cargoes, causing cash premiums for aviation fuel to hit a one-month low of 5 cents a barrel.
Regrade JETREG10SGMc1 closed the trading session at a discount of close to $1.50 a barrel, widening further by more than 10 cents from the previous session.
SINGAPORE CASH DEALS
– No deals for both fuels
REFINERY NEWS REF/OUT
– Production on the gasoline-producing Fluidic Catalytic Cracker 3 (FCC 3) was cut back on Thursday at Marathon Petroleum’s MPC.N 631,000-barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, said two people familiar with plant operations on Friday.
NEWS
– An executive of the Dangote Refinery said on Sunday oil majors were blocking its access to locally produced crude oil by selling it above market price or claiming it was unavailable, forcing the company to rely on expensive imports.
– Oil prices inched down on Monday as concerns of higher-for-longer interest rates resurfaced and lifted the dollar, offsetting support for oil markets from geopolitical tensions and OPEC+ supply cuts.
Source: Reuters (Reporting by Trixie Yap; Editing by Vijay Kishore)