Asia’s 10-ppm sulphur gasoil markets were volatile this week, with cracks hitting their lowest in two months on Friday, on mixed demand-supply cues stemming from uncertainty over the availability of Russian barrels and prompt October demand.
A closed east-west arbitrage at a discount of around $54 a metric ton, with some trade sources attributing it to a slightly stronger prompt fundamentals in Asia and lacklustre demand in northwest Europe, also weighed on the market. The spread hit almost a one-month high late week.
The late-week announcement on the ban being slightly lifted for Russian exports, which will likely ease supply tightness, turned the market slightly bearish.
ICE gasoil futures LGOc1 for October fell by more than 2% following the news.
Refining margins GO10SGCKMc1 closed at the lowest level in five sessions at slightly above $24 a barrel.
Spot cash premiums GO10-SIN-DIF slipped to $1.95 a barrel, in line with the less-backwardated market structure between October and November swap prices.
Spot cash premiums were also against a backdrop of more lower-priced sellers for October material, although last-minute purchases limited the downside.
Jet fuel refining margins JETSGCKMc1 were driven by thin spot trading liquidity, both in the swaps and physical markets, though some prompt sellers resurfaced late week. The arbitrage to the U.S. West Coast remained opened, but talks of a slowdown in flight capacity numbers weighed on discussions.
Weaker gasoil performance and limited jet fuel discussions narrowed the front month regrade JETREG10SGMc1 by almost 50% week-on-week to a discount of $2 a barrel.
SINGAPORE CASH DEALS O/AS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped by 3.8% in the week ended Thursday, data from Dutch consultancy Insights Global showed.
NEWS
– Indonesia may seek a new partner for state-run Pertamina’s refinery project in Tuban, East Java, due to uncertainty over its partnership with Russia’s Rosneft ROSN.MM, the chief economic minister has said.
– Russia’s government said on Friday it had lifted a ban on pipeline diesel exports via ports, removing the bulk of restrictions installed on Sept. 21.
– Russian oil pipeline monopoly Transneft TRNF_p.MM will resume diesel exports via ports in the Baltic Sea and Black Sea once it receives clearance from authorities and when suppliers are ready, TASS news agency reported on Friday, citing a company spokesman.
Source: Reuters (Reporting by Trixie Yap; Editing by Sherry Jacob-Phillips)