Asia’s prompt gasoline prices GL92-SIN and refining margins GL92-SIN-CRK were propped up on Thursday by some shortcovering demand for octane-92 cargoes owing to supply disruptions, against a backdrop of slightly fewer open market offers.
Support also came from expectations of lower stockpiles on the U.S. commercial inventory front.
Cracks surged by almost $1 a barrel day on the day as a reflection of the stronger prompt demand-supply fundamentals.
A portion of buyers need to cover their requirements for January shipments, with the market’s cash differentials turning back into wider premiums, one trade source said.
Gains, however, were ultimately capped by ample China-origin supplies in the meantime. In total, China’s major refiners have sold at least four spot lots for January-loading likely to southeast Asian receivers amid slow domestic demand and rising commercial stockpiles in the country.
Negative margins may be the only deterrent for more China-origin exports, one source said.
Demand for higher-octane gasoline, however, was curtailed given the seasonal lull, making it unprofitable for blenders to buy more octane boosters in the spot market.
Naphtha cracks were supported from the strength in prompt demand-supply fundamentals, despite weakness in crude prices in the afternoon trading session.
At least two regional buyers have yet to cover their February requirements and were still seeking spot lots.
Expectations of tight supplies persisting into February were prevalent from the prompt-forward backwardated price structure since the start of the week, with some traders uncertain about Middle East-origin supply availability as well.
Some sellers emerged for March loading cargoes, in line with the easing supply tightness expectations after February and physical deals in the open market emerged for the first time in almost two weeks.
NEWS
– Oil output in Russia, the third-largest producer in the world after the United States and Saudi Arabia, is expected to be steady or even increase next year as Moscow has largely overcome Western sanctions, analysts said.
– Diesel supply in Asia is set to jump in 2024, fueled by new refineries in the Middle East and robust exports from China, and is likely to outpace the region’s world-leading demand growth, analysts and trade sources said.
– Oil prices steadied on Thursday after falling sharply in the previous session as concerns eased about shipping disruptions along the Red Sea route even as tensions in the Middle East continued to rise.
INVENTORIES
– Singapore light distillate stocks rose by 67,000 barrels to a 6-week high of 13.367 million barrels in the week to Dec. 27, Enterprise Singapore data showed.
– U.S. crude oil and distillate inventories rose last week, while gasoline stockpiles fell, according to market sources, citing American Petroleum Institute figures on Wednesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Sonia Cheema)