Asia’s middle distillates’ derivatives price structure continued to weaken on Friday, with window activity remaining thin though June offers continued from a handful of refiners.
Diesel paper markets turned almost flattish for June and July, while jet fuel paper markets continued trading in a contango structure with front-month prices lower than forward month.
June spot sales took the spotlight for this week, with a handful of northeast Asia-based refiners out with their sale tenders.
Most diesel refiner sales remained in the discounted territory, likewise a month earlier, as cautiousness on rising supply availability was evident among traders.
A large inflow of India-origin diesel/gasoil into southeast Asia, mostly loading in May, also fuelled worries of more-than-sufficient supplies.
The supply glut situation also applied to jet fuel markets, given expectations of higher supplies for June in the region – especially from China oil majors.
Jet fuel prices and spot differentials were under pressure for most parts of the week, weighed on by weakness in the arbitrage windows to northwest Europe and the U.S. west coast.
Healthy complex refining margins also meant that major regional refineries will likely keep their runs at current levels even after the maintenance season gradually ends next month, keeping supply at stable levels.
The 10ppm sulphur gasoil refining margins (GO10SGCKMc1) clawed back some of earlier losses, closing at around $15.8 a barrel – still softer by $1 week on week.
On the trading window, lower-priced offers were prevalent against a backdrop of a weakening paper market structure – though deals were scant again.
The 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) slipped to 22 cents per barrel, slightly more than a one-month low, weakening further from last week.
Meanwhile, regrade continued to hover at discounts of around 90 cents per barrel, barely moving from the previous session.
Jet fuel cash markets reversed some of early week’s losses, climbing to around 7 cents per barrel as buyers resurfaced on the window.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub, which include diesel, were down 1.4% on a slowdown in imports, coming from the U.S., Middle East and India.
REFINERY NEWS
– Phillips 66 is expected to lay off most workers at its 139,000-barrel-per-day Los Angeles-area refinery in December, sources familiar with the matter said on Thursday.
NEWS
– Spot premiums for Murban crude have hit six-month lows on surging supply as the United Arab Emirates ramps up output following OPEC+’s decision to accelerate production hikes and compete head-on with U.S. shale oil, traders and analysts said.
– Shell Indonesia has agreed to sell ownership of its gas station business to a joint venture between Citadel Pacific Limited and Sefas Group, but will keep its lubricant business, the company said on Friday.
– Oil producer Chevron’s CVX U.S. license to operate in Venezuela will expire on May 27 as planned, Secretary of State Marco Rubio said in a post on his personal X account.
Source: Reuters