Asia’s gasoil markets recorded an uptick in spot procurement and sales tenders for February, with brisk trading activity for physical cargoes in the open market trading session also emerging.
February discussions picked up slightly in line with expectations, with at least two buyers and sellers out in the spot market to settle their requirements.
Expectations on demand-supply fundamentals for next month remained mixed as evidenced from the bids and offers from various trading houses in the open market, one refinery source said.
There is also the consideration of March and April refinery maintenance plans, the source added.
Spot cash premiums were as a result little changed at around 90 cents a barrel, in line with the stable market backwardation and a smaller buy-sell gap.
Ready buyers and sellers were in the market for both end-January and February loading shipments, contributing to the rise in spot trading liquidity overall.
Refining margins climbed slightly to $21 a barrel, tracking the increases in the ICE gasoil futures market and slightly more upbeat buying activities in the swaps market.
Jet fuel refining margins were almost unchanged amid mixed fundamentals.
The arbitrage window between Asia and the U.S. West Coast widened slightly at the close of the market, but it was still deemed as unprofitable for sellers now.
Market uncertainty on how the recovery of international flight numbers from China for January also weighed, despite recovery in international air travel at the end of last year.
However, some demand could still be evident during the Lunar New Year holiday period soon in early February.
Regrade widened to a discount of 85 cents, almost a near-two month low as a reflection of the stronger gasoil performance in the afternoon trading session.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– U.S. crude oil inventories fell last week, while fuel stockpiles rose, according to market sources citing American Petroleum Institute figures on Tuesday.
– Gasoil and jet fuel/kerosene volumes stored at key trading hub Singapore were at 7.363 million barrels in the week ended Jan. 3, down from 8.091 million barrels a week ago, official data from Enterprise Singapore showed.
NEWS
– Oil prices rose on Thursday, adding to solid gains in the previous session on persisting concerns over Middle Eastern supply following disruptions at a field in Libya and heightened tensions around Israel-Gaza war.
– China’s aviation regulator said on Thursday it expects the number of international flights to and from the country to reach 6,000 per week by the end of this year, or about 80% of pre-COVID levels.
– Scores of Saudi Arabian companies said their earnings could be dampened this year as production costs will increase after state energy group Saudi Aramco 2222.SE notified them it would sharply raise feedstock and fuel prices.
Source: Reuters (Reporting by Trixie Yap; Editing by Krishna Chandra Eluri)