Asia’s middle distillates markets went back to being thinly discussed on the trading window, a flip from the slew of deals in the previous session, as a buy-sell gap hindered activity, while April refiner sales continued.
Taiwan’s Formosa Petrochemical Corp started their April offers for both 10ppm sulphur and 500ppm sulphur gasoil.
While spot sales seem to be discussed or done at a higher price from March, traders are still monitoring for any supply disruptions as the planned maintenance season starts, two refinery sources said.
Discussion levels have gained by about 20-30 cents for April spot cargoes so far, compared with March, Reuters records showed.
Fundamentals may turn bearish if the east-west arbitrage price spread continues to narrow despite earlier flows of India-origin barrels to markets in northwest Europe, one trade source said.
More pulling of cargoes from Europe to the U.S., given the reverse transatlantic arbitrage opportunities, will need to emerge to alleviate supply levels even going into April, a second source added.
So far no fixtures have been recorded for March shipments yet on the Europe-US route, a shipbroking source said.
Refining margins closed the trading session at slightly firmer levels of around $15.40 a barrel.
Trading activity on the window turned slow-paced, with lower-priced offers being scant, unlike the previous trading session.
Cash differentials for 10ppm sulphur gasoil, however gained 2 cents per barrel to 52 cents from the previous trading session to reflect the steeper market backwardation.
Regrade declined slightly to a discount of slightly less than $1.4 a barrel as gasoil paper markets turned weaker in comparison with jet fuel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Singapore’s middle distillates stock levels swelled to nearly a three-month high of more than 11 million barrels despite rising net exports, as diesel/gasoil inflows stayed brisk from northeast Asia, official data showed on Thursday.
– U.S. crude oil stockpiles rose more than expected last week, while gasoline and distillate inventories fell as product exports rose amid refinery spring maintenance, data from the Energy Information Administration showed on Wednesday.
REFINERY NEWS
– Phillips 66’s PSX.N 258,500 barrel-per-day Bayway refinery is undergoing a major turnaround, research company IIR Energy said on Wednesday.
NEWS
– Mexican state company Pemex is in talks with potential buyers in Asia, including China, and Europe, as it seeks alternative markets for its crude after U.S. President Donald Trump imposed tariffs on imports, a senior Mexican government official said.
– OPEC oil output rose in February, a Reuters survey found, as Iranian exports held strong, despite renewed U.S. attempts to curb the flows, and Nigeria boosted output above its target within the wider OPEC+ group.
– Mexican fuel oil cargoes are heading to Asia and Europe this month as higher prices draw supply, while traders eye more diversions after U.S. President Donald Trump imposed tariffs on imports this week, trade sources and analysts said.
Source: Reuters