Asia’s middle distillates markets rebounded as a knee-jerk reaction to firmer crude markets and some stabilisation in the Middle East conflict, though physical spot discussions on the window were largely illiquid.
July physical sales activity from northeast Asian refiners remained ongoing, though discussion levels were barely moving from earlier and hovering at discounts of 40-90 cents per barrel for diesel and around $1 discounts for jet fuel.
A few more offers should start emerging from China refiners, especially for jet fuel, in the next few days.
Spot sales activity has been brisk these two weeks, given the robust performance in refining margins, though overall supply-demand balances have not fluctuated much.
China-origin diesel exports are estimated to dip slightly to around 700,000 metric tons, compared with earlier expectations of nearly 1 million tons, because of squeezed profit margins outside home.
At the market’s close, refining margins clawed back earlier losses and returned to slightly more than a one-year high of around $19.5 a barrel.
On the trading window, a buy-sell gap hampered spot deals and 10ppm sulphur gasoil cash differentials tracked the paper market structure mostly and closed at premiums of around $1.13 a barrel.
Regrade widened back to discounts of around $1.80 a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Middle distillates stocks held at Fujairah Oil Industry Zone gained to two-month highs of 2.044 million barrels in the week ended June 23, according to industry information service S&P Global Commodity Insights.
– U.S. crude and distillate stocks fell last week while gasoline inventories rose, market sources said, citing American Petroleum Institute figures on Tuesday.
REFINERY NEWS
– Russia’s expected offline primary oil refining capacity in June has been revised up by 5% from the previous plan to 3.22 million metric tons due to adjustments in maintenance plans, according to Reuters calculations based on data from industry sources.
NEWS
– U.S. President Donald Trump said on Tuesday that China can continue to purchase Iranian oil after Israel and Iran agreed to a ceasefire, a move that the White House clarified did not indicate a relaxation of U.S. sanctions.
Source: Reuters