Asia’s middle distillates markets recorded a slew of spot deals on Friday’s trading window, supporting cash premiums, while the focus this week was mainly on China’s export plans for January following the release of quota allowances.
China’s January exports were estimated to surge to above 2 million barrels for jet fuel, though diesel export estimates were little changed month on month, China-based trade sources and one Singapore-based trade source said.
“Processing export quotas were raised by 1.35 mmt (year on year), which allows more domestic jet fuel supply into the bonded zone,” said FGE analysts in a client note.
Spot activity was initially upbeat before the mid-week holidays, but liquidity slowed towards late week as traders were either away or waiting for a clearer market direction for January.
Refining margins (GO10SGCKMc1) were little changed from the previous session, but they continued to hover at near three-week lows of around $15 a barrel.
Paper markets received some downside pressure from a narrower east-west arbitrage.
The 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) gained further to a premium of around 87 cents a barrel, more than a one-month high, reflecting the consistently strong buying interest on the trading window for January cargoes.
Likewise, jet fuel spot markets swung back into a premium as buyers re-emerged from the sidelines of the trading window.
Regrade (JETREG10SGMc1) continued trading at discounts of more than $1 a barrel amid worries of ample supplies for jet fuel in the near term.
SINGAPORE CASH DEALS
– Two gasoil deals, one jet fuel deal.
INVENTORIES
– Middle distillates stocks held at Fujairah Oil Industry Zone fell to a one-month low of 2.24 million barrels for the week ended Dec. 23, according to industry information service S&P Global Commodity Insights.
NEWS
– China’s industrial profits fell at a slower clip in November, official data showed on Friday, but the annual decline in earnings this year is expected to be the worst in over two decades due to persistently soft domestic consumption.
– India’s Bharat Petroleum Corp plans to invest $11 billion in southern Andhra Pradesh state for a new refinery and petrochemical project to meet rising fuel demand in the world’s fastest-growing major economy, its chairman said.
– Mexican state energy company Pemex PEMX.UL resumed refining operations at is new Olmeca refinery in November, working at nearly 17% of its 340,000-barrel-per-day (bpd) capacity after being fully offline in October, official numbers showed this week.
– Major European energy companies doubled down on oil and gas in 2024 to focus on near-term profits, slowing down – and at times reversing – climate commitments in a shift that they are likely to stick with in 2025.
– Oil prices rose slightly on Friday and were on track for a weekly rise, spurred by expectations economic stimulus efforts will prompt a recovery in China, while a stronger dollar capped gains.
Source: Reuters