Asia’s middle distillates markets were thinly discussed on the trading window through the week, with traders fervently eyeing October discussions next week while the swap market structures weakened further nearing the month end.
September spot sales for both diesel and jet fuel were prevalent in early half of the week, with several regional oil majors still clearing their usual export requirements, with deals mostly done in discounted territory.
China’s September planned export volumes came into focus as well, with markets waiting for the release of the third batch of product export quotas soon.
On the shipping front, talks of some very large crude carriers taking diesel on the east-west trade route also resurfaced, with Atokos and Nissos Anafi in the mix for now.
The diesel east-west price spreads hovered mostly at discounts of $40-45 per metric ton this week, indicating that swing suppliers are likely to pivot their cargoes west in the near-term.
For jet fuel, the arbitrage between Asia and the U.S. west coast widened ahead of lower supply expectations after one major California refinery is expected to wind down operations next week.
Refining margins (GO10SGCKMc1) recovered some losses from the previous session to close at $16.1 a barrel.
However, losses for the 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) continued week on week, with values dipping to below 60 cents per barrel. The trading window stayed quiet.
Regrade (JETREG10SGMc1) discounts widened further to slightly above $1.8 a barrel.
SINGAPORE CASH DEALS
– No deals for gasoil or jet fuel
INVENTORIES
– Gasoil stocks, which include diesel, rose 2.6% to 2.09 million tons, with demand lingering as the summer driving season comes to an end, Insights Global’s Rick Veringmeier said.
REFINERY NEWS
– Mexico’s 285,000 barrel-per-day Minatitlan refinery was in the process of restarting on Thursday, while the 340,000 bpd Olmeca refinery was still offline, sources told Reuters on Thursday.
– Phillips 66 will begin shuttering its 139,000-barrel-per-day Los Angeles-area refinery in September, people familiar with the matter said.
NEWS
– Oil prices fell on Friday, but were set for a weekly gain, tugged between uncertainty about Russian supply and expectations of lower demand as the summer driving season in the United States, the world’s biggest fuel consumer, nears its close.
– Russia’s Ust-Luga oil export terminal will operate at around 350,000 barrels per day in September, or about half its usual capacity, following damage to pipeline infrastructure from Ukrainian drone attacks, two industry sources told Reuters.
Source: Reuters