Asia’s middle distillates markets slipped, with diesel spot differentials maintaining at nearly four-month lows as downside pressures from higher inventories in Singapore and sufficient February supplies from northeast Asia weighed.
Shaky demand in the near-term for February cargoes also bore down, amid talks that more South Korea origin barrels are bound for Singapore in the next two weeks.
Inventories at key trading hub Singapore shot up to a seven-week high of more than 10 million barrels, as a result of these arrival cargoes.
While the east-west price spread was slightly wider than before, some traders were still trying to narrow the price difference between the two regions and that could limit possible flows on this route ultimately, two sources said.
Refining margins (GO10SGCKMc1) hit a one-week low of around $15.6 a barrel.
The spread between February and March paper prices slipped further, a reflection of more selling activity in the front month.
Overall market weakness was capped by possibly lower export programmes from China for March, given the better domestic sale profits and slightly tighter supplies as Shandong teapot crude runs decline further on feedstock cost woes.
Cash differentials (GO10-SIN-DIF) closed the trading session lower once again, hovering at near four-month lows of a premium around 12 cents per barrel.
March regrade value (JETREG10SGMc1) was little changed at around a discount of 96 cents a barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deals
INVENTORIES
– U.S. crude oil inventories rose sharply last week as demand softened on ongoing refinery maintenance, the Energy Information Administration (EIA) said on Wednesday.
– Singapore’s middle distillates stocks rose 13% from last week despite higher net exports, official data showed on Thursday, amid falling 10ppm sulphur gasoil February derivatives prices since earlier in the week.
NEWS
– SK Innovation Co Ltd 096770.KS, owner of South Korea’s top refiner SK Energy, said on Thursday it expects refining margins to remain flat in 2025 due to rising jet fuel demand, despite production increases expected in countries such as the United States and Canada.
– Iran’s President Masoud Pezeshkian urged OPEC members to unite against possible U.S. sanctions on the major oil producer, after U.S. President Donald Trump said he would seek to drive Tehran’s oil exports to zero.
– Oil prices edged up in Asian trading on Thursday after Saudi Arabia’s state oil company sharply raised March oil prices, but the increase was barely a blip on the biggest slide in benchmark Brent prices in nearly three months the previous day.
Source: Reuters