Asia’s middle distillates markets turned slightly upbeat and gained further as timespreads in paper markets received support from hopes of U.S.-China tariff negotiations to proceed, while May spot refiner sales were in full motion.
May discussions were a key focus, with the usual suspects from northeast Asia seeking to offload their spot cargoes in line with monthly requirements.
So far, for 10ppm sulphur gasoil cargoes, Taiwan-based refiners have sold at least 1.9 million barrels, while South Korea-based refiners have sold and offered up to 1.2 million barrels for May loading via spot tenders.
Private negotiations were likely ongoing as well for some other South Korean-origin barrels, though further details could not be confirmed.
Jet fuel wise, at least five or six cargoes for May from South Korea have either been sold or remain under discussions.
Most of these sales activity hovered largely in the discounted territory between 10 cents a barrel and 60 cents per barrel, against a backdrop of sufficient supplies expected – a situation similar for April loading cargoes.
Refining margins (GO10SGCKMc1) eased from one-week highs in the previous trading session to around $14 per barrel.
On the trading window, paper markets recorded wider timespreads for both May/June jet fuel and 10ppm sulphur gasoil and this proved supportive for window premiums.
The 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) climbed by more than 10 cents to close at 54 cents per barrel, more than a one-month high.
Regrade (JETREG10SGMc1) discounts barely moved again for the second straight session at around 97 cents per barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Middle distillates stocks held at Fujairah Oil Industry Zone gained slightly to 2.647 million barrels in the week ended April 14, according to industry information service S&P Global Commodity Insights.
– U.S. crude oil stocks rose last week, while gasoline and distillate inventories fell, market sources said, citing American Petroleum Institute figures on Tuesday.
NEWS
– Oil prices fell about 1% on Wednesday as shifting U.S. tariff policies fuelled uncertainty, prompting traders to weigh the potential impact of the U.S.-China trade war on economic growth and energy demand.
– China’s oil refinery throughput edged higher 0.4% in March from a high base a year earlier, data showed on Wednesday, supported by production increases at small independent plants and higher operations at a new plant.
– The Mexican government has halted U.S. fuel imports sent into the country by road as it cracks down on illegal deals, three sources familiar with the matter said on Tuesday.
– China on Wednesday unexpectedly appointed a new trade negotiator key in any talks to resolve the escalating tariff war with the U.S., replacing trade tsar Wang Shouwen with its envoy to the World Trade Organization.
Source: Reuters