Asia’s middle distillates markets softened slightly despite increased trading activity on a paper and physical price basis, with refiners selling off their July spot at discounts.

Some July spot cargoes were sold via private negotiations by northeast Asian refiners at discounts of around $1.50 a barrel, trade sources said, little changed from June deals.

Refining margins for the transport and industrial fuel declined by around 40 cents from the previous session.

Spot market discounts, however, narrowed further as buying interest for prompt cargoes improved slightly, with some traders putting in bids at premium levels.

Meanwhile, in the jet fuel markets, traders were cautious not to be overly bullish on demand despite the recent strength in regional buying interest, given the shaky arbitrage price spreads with the West.

Regrade discount widened back to almost $1 a barrel as a reflection of this cautiousness in the market.

SINGAPORE CASH DEALS

– No deals for gasoil or jet fuel.

INVENTORIES

– Singapore’s middle distillates stockpiles slipped below 10 million barrels to a four-month low in the week ending June 12 as net exports of jet fuel/kerosene and diesel/gasoil climbed week on week, official data showed on Thursday.

– U.S. crude stockpiles rose unexpectedly last week, driven largely by a jump in imports, while fuel inventories also increased, the Energy Information Administration (EIA) said on Wednesday.

REFINERY NEWS REF/OUT

– South Korean refiner Hyundai Oilbank has reduced production at the larger of its two crude distillation units (CDUs) in Seosan because of production woes at a gasoline-making unit, two industry sources with knowledge of the matter said on Thursday.

NEWS

– Twenty-two oil tankers are scheduled to load this month in Vancouver with crude from the expanded Trans Mountain pipeline, which is running around 80% full with a “little bit” of spot capacity also being used, a Trans Mountain executive said on Wednesday.

– Oil prices fell in early trade on Thursday as investors digested that the U.S. Federal Reserve had likely pushed back an interest rate cut to December, while ample U.S. crude and fuel stocks also weighed on the market.

– Russian naphtha shipments to South Korea have slowed amid a probe by the country into whether fuel from Russia has been mislabelled as supply from places where cargoes have been transshipped, according to trade sources and shipping data.
Source: Reuters (Reporting by Trixie Yap; Editing by Tasim Zahid)