Asia’s middle distillates markets extended gains as spot markets continued to see upbeat activity on window and offscreen, with more July refinery sales underway amid a firmer derivatives market structure.
Ongoing concerns that supply disruptions from the Middle East will surface pushed prices up further, against a continuous gain in freight costs on the routes from the Middle East.
At market close, the 10ppm sulphur gasoil refining margins (GO10SGCKMc1) surged further to hit slightly more than a one-year high above $19 a barrel.
Meanwhile, for jet fuel, at least six long-range tankers were slated to load the aviation fuel from Northeast Asia to Europe in June, several trade sources said.
On the trading window, major trading house BP continued its procurement activity but this time for July loading parcels, with spot premium levels slightly higher than the previous trading session.
Cash differentials (GO10-SIN-DIF) continued their upward trajectory, climbing to a five-month high of slightly above $1 a barrel.
Regrade (JETREG10SGMc1) widened further to discounts of nearly $1.5 a barrel, given the stronger performance in the gasoil markets.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal
INVENTORIES
– U.S. crude and gasoline stocks fell last week while distillate inventories rose, market sources said, citing American Petroleum Institute figures on Tuesday.
– Middle distillate stocks held at Fujairah Oil Industry Zone gained back to nearly two-month highs, hitting 1.893 million barrels in the week ended June 16, according to industry information service S&P Global Commodity Insights.
NEWS
– China’s exports of refined products, which include diesel, gasoline, aviation fuel and marine fuel, dropped 17.7% year-on-year to 4.41 million tons in May.
– Brent crude’s premium to Middle East benchmark Dubai soared above $3 a barrel on Wednesday, market sources said, hitting its highest since late September 2023, according to LSEG data.
– Developments in the Iran-Israel conflict in the next three to five days will be critical to global energy markets even though oil and gas supplies from the Gulf have not yet been disrupted, oil historian Daniel Yergin said on Wednesday.
Source: Reuters