Asia’s middle distillates cracking margins were little changed week-on-week as the market continued to weigh supply tightness worries in the West against unstable market fundamentals in the East.
Inventories remained on the lower side in northwest Europe at below 2 million metric tons, although Singapore stockpiles rose yesterday.
On the U.S. front, gains in official EIA data “will provide some comfort to the market as we head into the winter months, although distillate stocks are still well below the 5-year average,” ING analysts said in a note.
Despite the low inventory worries, open market discussions have been mostly on the downtrend since earlier in the week, as evidenced from ready sellers for both prompt and October spot lots.
It could be the calm before the storm since weather in the northern hemisphere has yet to turn cold, one Singapore-based analyst said.
There are no extra demand bright spots regionally for now, which could keep a lid on price movements in the near-term and lead some traders to take profit once cracks hit above $30 a barrel, the analyst added.
Refining margins for 10 ppm sulphur gasoil closed the week slightly shy of $30 a barrel, while jet fuel refining margins were at $28.31 a barrel.
Spot premiums for the transport and industrial fuel took a breather and slipped to $2.16 a barrel after gains in the past two weeks.
Regrade widened slightly as trades rolled over from September to October and jet fuel swaps were slightly weighed on by ample supplies from Asian refiners given better production margins for the aviation fuel compared with gasoil in the last three weeks.
SINGAPORE CASH DEALS O/AS
– No deals for both gasoil and jet fuel.
INVENTORIES
– Distillate stockpiles, which include diesel and heating oil, rose by 700,000 barrels in the week, versus expectations for a 240,000-barrel rise, the EIA data showed.
REFINERY NEWS
– TotalEnergies TTEF.PA began restarting the coker at its 238,000 barrel-per-day (bpd) Port Arthur, Texas, refinery on Thursday, said people familiar with plant operations.
NEWS
– Seasonal refinery maintenance in Russia that starts in September will lead to a rise in the state’s oil exports this month, despite Russia’s pledge to cut loadings, Reuters calculations based on sources’ data show.
– Oil extended losses on Friday, further receding from this week’s 10-month highs, as fears about the health of China’s slowing economy and a stronger U.S. dollar wiped out the gains triggered by supply cuts from major producers Saudi Arabia and Russia.
Source: Reuters (Reporting by Trixie Yap; Editing by Sonia Cheema)