Asia’s middle distillate markets jumped, tracking the impact of fresh U.S. sanctions on Russian entities, against a backdrop of higher ICE gasoil futures and the emergence of more offers for February spots from northeast Asian refiners.
The Asian paper market structure turned into a steeper backwardation even for forward months, with traders all cautious from a cost standpoint.
A handful of South Korea’s oil majors are slowly kicking off their February spot sales, but talks of likely limited supplies available as the maintenance season may start earlier this year remained supportive.
Some sales have been done at premiums to Singapore quotes, similar or higher levels to Taiwan-origin barrels from last week, two sources said, adding that it could be to reflect the expectation of higher refining costs in the near term.
Complex refining margins were at a three-month low of around $2.80 a barrel, LSEG pricing data showed.
On the jet fuel front, most China exports for January were heading to regional destinations such as Hong Kong and the Philippines, according to shipbroking sources.
Refining margins (GO10SGCKMc1) closed the trading session at nearly a two-month high of slightly above $17 a barrel.
Cash differentials (GO10-SIN-DIF) rose to nearly $1 a barrel, to reflect the strength in the market’s backwardation, despite some lower-priced offers for prompt-loading cargoes from Trafigura.
Regrade (JETREG10SGMc1) discounts were slightly shy of hitting a one-year high, closing at around $2.30 a barrel as gasoil futures surged at a quicker pace in comparison.
SINGAPORE CASH DEALS
– No deals for both fuels
REFINERY NEWS
– Motiva Enterprises plans to begin an overhaul of the gasoline-producing fluidic catalytic cracker by Jan. 21 at its 626,000-barrel-per-day Port Arthur, Texas, refinery, people familiar with plant operations said on Friday.
– Viva Energy says a power outage at Geelong refinery occurred on Jan. 12, with a restart of the facility expected between one and two weeks.
NEWS
– China’s crude oil imports fell 1.9% in 2024, data showed on Monday, the first annual decline in two decades outside of pandemic-induced falls, as tepid economic growth and peaking fuel demand dampened purchases.
– Chinese and Indian refiners will source more oil from the Middle East, Africa and the Americas, boosting prices and freight costs, as new U.S. sanctions on Russian producers and ships curb supplies to Moscow’s top customers, traders and analysts said.
– Oil prices extended gains for a third session on Monday, with Brent rising above $80 a barrel to its highest in more than four months, as wider U.S. sanctions are expected to affect Russian crude exports to top buyers China and India.
– The Kremlin said on Monday that the latest round of U.S. sanctions on the Russian energy sector risked destabilising global oil and energy markets, and Moscow would do everything possible to minimise their impact.
Source: Reuters