Asia’s middle distillates’ spot markets barely moved and were trading at rangebound levels on Tuesday as activity stayed at the same pace from the previous session, though jet fuel spot differentials were still under pressure.
Recent fluctuations in diesel markets have been minimal given limited changes in supply-demand balances, several trade sources said.
Some market support did come from a wider front-month east-west arbitrage price spread, at slightly more than $26 per ton discounts.
Meanwhile, traders were also eyeing changes on the macroeconomic front due to the ongoing US-China trade talks in London.
On the trading window, deals and discussion levels were mostly at similar premiums from the previous session, with BP continuing its shopping spree as the trading major’s procurement totals 950,000 barrels so far for this month.
The 10ppm sulphur gasoil cash differentials stayed firm as a result, at 59 cents premiums per barrel.
Separately, jet fuel markets were weighed down by talks of ample supply flows from northeast Asia and a closed arbitrage export window to the U.S. west coast markets.
Expected June flows from northeast Asia to Europe helped with alleviating the weakness, though traders were still concerned by rising supplies following a new start-up project in southeast Asia in the third quarter this year.
Jet fuel cash differentials slipped after lower-priced offers were readily available on the trading window.
Regrade discounts were still maintaining at discounts of around $1.2 a barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deals
INVENTORIES
– U.S. crude oil stockpiles likely rose last week, along with distillate and gasoline inventories, a preliminary Reuters poll found on Monday.
NEWS
– Oil prices climbed on Tuesday as investors awaited the outcome of U.S.-China talks that could pave the way for easing trade tensions and improve fuel demand.
– California’s fuel imports rose to the highest in four years in May as refiners turned to historical trading partners in Asia and tapped some unusual routes to make up for shortages in the No.2 U.S. oil consumer state, according to shipping data and traders.
– OPEC oil output rose in May by less than the volume planned, a Reuters survey found, as Iraq made further cuts to compensate for earlier pumping above target and Saudi Arabia and the United Arab Emirates made smaller hikes than allowed.
Source: Reuters