Asia’s middle distillates markets saw a slip in prices on Tuesday, amid weakness across the energy markets and thinner paper market liquidity, though spot activity on window went at higher premiums.
Strength in prompt paper markets remained evident, with the October November backwardation firm.
Unplanned outages remained a key focus for the market, with some traders expecting shortcovering demand from the Pacific region to persist into November.
Talks of earlier lowered production rates in Australia were also confirmed, which can contribute to these demand gains.
Diesel imports into Australia are slated to rise 20-30% month on month in October so far, LSEG and Kpler shiptracking data showed.
Meanwhile, China-origin diesel exports are so far averaging at 150,000 metric tons for October loading, Kpler and Vortexa shiptracking data showed.
However, some traders were cautious not to be overly bullish as supplies could ramp back up after some refineries return from scheduled maintenance in November.
Refining margins slipped by around $1 a barrel from the previous trading session, against a backdrop of weaker paper discussion levels and around a 4% fall in ICE gasoil futures.
Cash premiums rose by 5 cents a barrel, despite the overall price weakness, with Gunvor buying at premiums of 60 cents a barrel from Shell for an early November loading cargo.
Spot sales wise, some jet fuel barrels from Rongsheng Petrochemical were on offer for end-Oct to early Nov loading.
Regrade gained to premiums of 8 cents a barrel, as gasoil paper prices slipped at a faster pace than jet fuel.
SINGAPORE CASH DEALS
One gasoil deal, no jet fuel deal
INVENTORIES
U.S. crude oil stockpiles were expected to have risen last week, while distillate and gasoline inventories likely fell, a preliminary Reuters poll showed on Monday. EIA/S
REFINERY NEWS REF/OUT
Orlen’s Mazeikiai oil refinery in Lithuania is undergoing October maintenance works on several of its units, according to industry consultancy IIR Energy.
NEWS
– Ampol ALD.AX, Australia’s top fuel retailer, said on Tuesday it would undertake further maintenance at its Lytton refinery next month after the company reported a sharp drop in third-quarter output, sending its shares to a 21-month low.
– India’s Reliance Industries reported a drop in second-quarter profit on Monday, as its oil-to-chemicals (O2C) business grappled with lower margins, more than offsetting a boost from price increases for the company’s mobile services.
– Oil prices slid as much as $3 to a near two-week low during Asian trade on Tuesday on the back of a weaker demand outlook and after a media report said Israel is willing not to strike Iranian oil targets, which eased fears of a supply disruption.
– Russia has available facilities to increase its crude oil production by around 700,000 barrels per day, according to a report published by the International Energy Agency (IEA) on Tuesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shailesh Kuber)