The pace of trading activity in Asia’s middle distillates market quickened in line with expectations, as a handful of buyers came out seeking their January requirements and selling interest started to trickle into the market.
Cash differentials for spot January parcels firmed by more than 68% day on day to a discount of 5 cents per barrel, reflecting the strength in buying interest for a second consecutive session.
Lower-priced sellers continued to be absent for the second trading session this week, supporting gains in cash differentials.
South Korea’s oil majors also started their January spot sales, with SK Energy at least selling two lots for around mid-January delivery late yesterday.
Term supplies were too expensive and we are looking at spot purchases instead, one regional importer said, adding that they did not secure any contracts for next year delivery in the end.
Refining margins for the fuel closed the trading session 3.7% higher from the previous session against a backdrop of rising ICE gasoil futures
Jet fuel refining margins climbed at a quicker pace for the second straight session, widening the regrade JETREG10SGMc1 spread to a premium of 25 cents a barrel – more than double from yesterday.
SINGAPORE CASH DEALS
– No deals for both fuels.
INVENTORIES
– Analysts in a Reuters poll estimated stockpiles of gasoline USOILG=ECI were up by about 2.4 million barrels last week, and distillate stockpiles USOILD=ECI, which include diesel and heating oil, were seen increasing by about 1.2 million barrels.
NEWS
– Oil prices ticked up on Tuesday but investors remained cautious ahead of key interest rate decisions and inflation data releases, while concerns over excess supply and slowing growth in demand kept a lid on gains.
– European Union countries are close to agreeing a deal on a proposed 12th package of sanctions on Russia focused on a Russia-origin diamond ban and new measures to stem the flow of Russian oil, according to four people familiar with the matter.
– The Biden administration expects the Treasury to release guidance by the end of this week on whether to make it easier for sustainable aviation fuel made from corn-based ethanol to qualify for subsidies, multiple sources familiar with the administration’s thinking told Reuters.
– South Korea will extend tax breaks on oil products for two more months until the end of February, the finance minister said on Tuesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shailesh Kuber)