Asia’s middle distillates markets started to see a pick up in May refiner spot sales from the sidelines as some usual northeast Asia exporters continued to offer their regular requirements, while spot differentials neared three-month highs.
China exporters resurfaced into the spot market for May shipments, in line with earlier expectations, though most offers were for jet fuel cargoes given the better export profitability.
Export estimates for May from China were less than 300,000 metric tons for diesel and around 2.2 million tons for jet fuel, with diesel volumes falling in line with the weakening margins outside of home.
Markets were mostly bullish for the near-term given the lack of cargoes from China and a bountiful of better demand outlooks in some regional markets such as Australia and Vietnam.
A general lack of swing barrels from India and Middle East coming to Asia in the next two weeks proved supportive as well, one trade source said.
At the market’s close, the 10ppm sulphur gasoil refining margins (GO10SGCKMc1) gained slightly to around $14 a barrel reflecting the firmness in front-month paper markets.
Meanwhile, cash differentials (GO10-SIN-DIF) gained further to 61 cents per barrel, hitting a new high since end-January – though a lack of trades persisted on the open trading window.
Regrade (JETREG10SGMc1) closed the trading session at a narrower discount of around 90 cents per barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Middle distillates stocks held at Fujairah Oil Industry Zone slipped 2.489 million barrels for the week ended April 21, according to industry information service S&P Global Commodity Insights.
– U.S. crude oil, gasoline and distillate stocks fell last week, market sources said, citing American Petroleum Institute figures on Tuesday.
NEWS
– Oil prices climbed more than 1% on Wednesday, as investors weighed a fresh round of U.S. sanctions on Iran, a drop in U.S. crude stocks and a softer tone from President Donald Trump towards the Federal Reserve and his tariff war with China.
– Dutch tank storage group Vopak reported a marginal rise in first-quarter core earnings on Wednesday, driven by contributions from growth projects.
– New U.S. sanctions against Iran’s energy sector point to Washington’s “lack of goodwill and seriousness” over dialogue with Tehran, Iran’s Foreign Ministry spokesperson said on Wednesday ahead of Iran-U.S. nuclear talks this weekend.
Source: Reuters