Asia’s middle distillates spot cash differentials gained on Wednesday as paper market structures continued to strengthen, though trading momentum remained at similar pace as the previous session amid some cautious trading sentiment.
Support came from unexpected supply disruptions at one northeast Asia refiner’s production site, with some shortcovering activities ongoing for June.
Meanwhile, ICE gasoil prices gained on talks of bullish sentiment for third-quarter market fundamentals – though a portion of Asian markets remained skeptical given sufficient supplies.
However, a portion of the market was waiting with bated breath for refiners to kick off their July spot sales, likely a week later, to see how supply fundamentals will pan out.
The 10ppm sulphur gasoil refining margins closed the trading session higher, breaching the $16 per barrel level.
Meanwhile, on the trading window, a buy-sell gap still hindered more deals from being done though spot cash differentials gained slightly to 27 cents per barrel given the firmer paper market structure.
The arbitrage spread between Asian and U.S. West Coast jet fuel prices were little changed from the previous trading session, remaining at $8-9 per barrel.
Regrade held steady at discounts of around $1.05 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 Tuesday.
NEWS
– Oil prices ticked up in early trading on Wednesday as the U.S. barred Chevron from exporting crude from Venezuela under a new authorization on its assets there, raising the prospect of tighter supply.
– A wildfire in the Canadian province of Alberta prompted the temporary shutdown of some oil and gas production and forced residents of a small town to evacuate.
– The world’s biggest oil exporter Saudi Arabia may cut its crude prices for Asian buyers in July to the lowest in six months, refiners said, tracking losses in benchmark prices driven by rising supply from OPEC+.
Source: Reuters