Asia’s 10 ppm sulphur gasoil refining margins gained for a second straight week on firmer ICE gasoil futures to $19.41 a barrel, despite mixed regional demand-supply forecasts for August and volatile performance in the West.
Spot premiums for 10ppm sulphur gasoil lost steam in the last trading session of the week as there were more lower priced sellers in the market. However, they still rose for the second consecutive week to $1.09 a barrel on early-week demand.
Offers remained prevalent in the open market on Friday as participants remained bearish at the close of the week’s trading session, believing that more cargoes are likely to emerge from northeast Asian suppliers a week later just like how July-loading spot sales went.
But there were expectations of 10 ppm sulphur gasoil supplies tightening for August to September, likely the key reason for the spate of buying activities, which was further attributed to sellers wanting to replace 500 ppm sulphur gasoil contract deliveries with the former.
There is a lack of August sellers for 500ppm in the market, compared with 10ppm, but buyers still need to cover their deliveries to southeast Asian regions such as Myanmar and Vietnam, one northeast Asian refinery source said.
Some sellers are trying to give us 10 ppm cargoes instead of 500 ppm, citing availability issues, a separate southeast Asia market player said.
Jet fuel trading activity was muted again as the arbitrage to the U.S. West Coast narrowed after freight rates rose by around 10% on the South Korea-US West Coast route, one shipbroking analyst said.
On the regional front, Taiwan’s CPC Corp concluded a tender for a 300,000-barrel cargo at a premium of more than $1 a barrel to FOB Singapore quotes for August delivery.
Refining margins for the aviation fuel also climbed for the second week, tracking gasoil margin gains, while regrade JETREG10SGMc1 was almost steady week-on-week at a discount of $1.55 a barrel.
SINGAPORE CASH DEALS O/AS
– No gasoil or jet fuel deal.
INVENTORIES
– Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell 1.5% in the week to Thursday to their lowest since late December, data from Dutch consultancy Insights Global showed.
NEWS
– A malfunction on Thursday morning triggered a partial shutdown of Chevron Corp’s 245,271-barrel-per-day refinery in Richmond, California, said a spokesperson for the Contra Costa County Health Department.
– Oil prices were set to post their third straight week of gains for the first time since April despite falling slightly on Friday, due to broader supply concerns over disruptions in Libya and Nigeria, and hopes of higher U.S. crude demand amid cooling inflation.
– Qatar Energy raised the term price for cargoes of al-Shaheen crude oil loading in September, trade sources said on Friday, following a recent rise in Middle Eastern oil prices amid expectations of tight sour crude supply.
Source: Reuters (Reporting by Trixie Yap; Editing by Shinjini Ganguli)