Asia’s middle distillates markets were mixed on Tuesday, following uptick in crude futures and ICE gasoil prices, some positive outlooks in the next two months and weaker trading activity for January.
Market fundamentals are expected to be supported going further into the first quarter, analysts say.
“Some 760,000 barrels per day of refining capacity in the region (excluding China) is also scheduled for spring maintenance in March, which will reduce gasoil supply by 120,000 barrels per day m-o-m,” said FGE analysts in a client note.
“These factors should provide support to Singapore gasoil cracks in February and March.”
Spot cash premiums GO10-SIN-DIF dipped almost 10 cents a barrel as lower-priced sellers were prevalent throughout the entire afternoon trading session, amid a narrower backwardation in the paper swaps market.
However, robust buying interest limited overall weakness, with major trading house Vitol also seeking higher sulphur gasoil cargoes for end-January loading.
Jet fuel refining margins JETSGCKMc1 and gasoil futures climbed, but activity was muted.
Regrade JETREG10SGMc1 rose slightly to a discount of 50 cents a barrel, reflecting the weakness in gasoil futures in comparison with limited liquidity in the jet fuel markets.
SINGAPORE CASH DEALS O/AS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– Analysts in a Reuters poll estimated stockpiles of gasoline USOILG=ECI were up by about 4 million barrels last week, and distillate stockpiles USOILD=ECI, which include diesel and heating oil, were seen increasing by about 4 million barrels. EIA/S
REFINERY NEWS REF/OUT
– The large crude distillation unit and coker were shut on Monday at Motiva Enterprises’ MOTIV.UL 626,000 barrel-per-day (bpd) Port Arthur, Texas refinery, the largest in the United States, said sources familiar with plant operations.
– The small crude distillation unit is operating at a reduced production level at TotalEnergies’ 238,000 barrel-per-day (bpd) Port Arthur refinery, said people familiar with plant operations on Monday.
NEWS
– Oil and fuel tanker traffic in the Red Sea was stable in December, even though many container ships have rerouted due to attacks by Iran-aligned Houthi militants, a Reuters analysis of vessel tracking data showed.
– Oil prices steadied on Tuesday after sliding in the previous session, as markets weighed Middle East tensions against demand worries and rising OPEC supply.
Source: Reuters (Reporting by Trixie Yap; Editing by Varun H K)