Asia’s middle distillates market activity turned upbeat again on Thursday, as a handful of refiners kickstarted their January sales and spot window trades resurfaced after one session of hiatus.
January offers were in the market, with South Korea’s GS Caltex offering at least 2-3 cargoes via a sales tender that closes early next week.
Sales by one key China oil major for early January shipments also sparked talks of export quotas likely emerging from Beijing soon for next year.
Prompt cargo sales almost remained prevalent, as evidenced by end-December jet fuel offers by SK Energy, though buying interest may slow soon.
Meanwhile, buying interest from Indonesia’s Pertamina emerged for some jet fuel term cargoes arriving in January-March 2025.
Colder-than-expected winter weather in some parts of northeast Asia may keep the market slightly bullish going into January, one trader said, adding that more spot offtaking from Japan could emerge again if this continues.
Refining margins closed the trading session at a two-week high of $15.8 a barrel.
Cash differentials for 10ppm gained 10 cents a barrel from the previous session, amid some buying interest for January cargoes but deals remained scant given a lack of offers.
Regrade, however, plunged further to a discount of nearly 50 cents a barrel, reflecting the better performance of gasoil paper prices.
SINGAPORE CASH DEALS
– No gasoil deal, one jet fuel deal
INVENTORIES
– U.S. crude inventories fell for the third time in a row, while fuel stockpiles rose in the week ending Dec. 6, the Energy Information Administration (EIA) said on Wednesday, as refinery activity remained seasonally strong.
– Singapore’s middle distillates stockpiles creeped back up to above 11 million barrels for the first time in more than three months as diesel/gasoil net exports fell, official government data showed on Thursday.
NEWS
– OPEC cut its 2024 global oil demand growth forecast for a fifth straight month on Wednesday and by the largest amount yet, a series of downgrades that highlights China’s sputtering role as the world’s demand growth engine.
– The United States is continuing to look for creative ways to reduce Russia’s oil revenue and lower global demand for oil creates an opportunity for more sanctions, Treasury Secretary Janet Yellen said on Wednesday.
– Russia’s state oil firm Rosneft ROSN.MM has agreed to supply nearly 500,000 barrels per day (bpd) of crude to Indian private refiner Reliance RELI.NS in the biggest ever energy deal between the two countries, three sources familiar with the deal said.
– Saudi Arabia’s crude oil supply to China is set to rebound to about 46 million barrels in January, trade sources said on Thursday, after the kingdom cut its official selling prices to Asia to a four-year low.
Source: Reuters (Reporting by Trixie Yap; Editing by Eileen Soreng)