Asia’s 10 ppm sulphur gasoil spot cash premiums rose on Thursday, as markets remained upbeat on tight supply forecasts going into the fourth quarter with the Russian ban in place and uncertainty on China export availability.

This was against a backdrop of a rebound in ICE gasoil futures towards the market’s close after news of a prolonged Russian ban on low-sulphur diesel emerged.

The spot premiums rose to an eight-month high of $2.70 a barrel, up from $2.59 in the last session.

The market’s reaction was mixed on the fourth batch of refined fuel product export quotas from China, though majority were bent on the likelihood of no fourth batch quotas.

The 10 ppm sulphur gasoil margins also rose for the third session on Thursday, as gasoil futures rose quicker than crude futures.

More shipping enquiries are in the market for the China-U.S. West Coast route, several shipbroking sources said, because of the opened arbitrage.

Selling interest from Chinese majors continued to be prevalent because of the robust export margins, with Taiwan’s CPC Corp also buying one spot lot from a China-based major.

Regrade hovered at almost two-month lows of minus $3.58 a barrel as gasoil strength continued to offset jet fuel fundamentals.

SINGAPORE CASH DEALS

– One gasoil deal, no jet fuel deal.

INVENTORIES

– U.S. crude oil stockpiles fell more than expected last week, with inventories at the key Cushing, Oklahoma, storage hub dropping to the lowest in over a year, while gasoline and distillate inventories rose, the Energy Information Administration said on Wednesday.
– Middle distillates inventories held at key storage hub Singapore climbed by 4% week-on-week to more than a six-month high as the city state turned net importer of jet fuel/kerosene, despite an increase in gasoil outflows for the week to the West, official data showed on Thursday.

NEWS

– Crude oil processing at Mexico’s six local refineries rose slightly in August, data from state-owned oil company Pemex showed, but the facilities are operating at barely half their capacity, forcing the country to import large volumes of fuel.
– U.S. oil jumped nearly $1 a barrel on Thursday to its highest in more than a year as a steep drop in crude stocks in the United States added to worries of tight global supplies from OPEC+ cuts led by Saudi Arabia.
Source: Reuters (Reporting by Trixie Yap; Editing by Varun H K)