Asia’s diesel spot prices softened slightly, against a backdrop of weakening energy and ICE gasoil futures, with trading window activity minimal for a second consecutive session, but paper market structures held firm.
Sales by refiners remained the market’s key focus, but the total number of spot offers from northeast Asia’s refiners were little changed month on month for September.
South Korea’s refiners have possibly sold nearly 20 spot 10ppm sulphur gasoil cargoes for September shipments so far, trade sources and Reuters tender records showed.
Traders were eyeing China’s third batch of fuel export quotas to come in the first half next month, though talks of a surprise fourth batch were also rife despite a lack of further details.
Refining margins (GO10SGCKMc1) slipped back to a one-week low of $16.6 a barrel.
Mostly tepid demand regionally due to weather-related reasons is capping any uptrend in the market near-term, several trade sources said.
On the trading window, activity remained muted and the 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) held steady from a day earlier at premiums of around 63 cents per barrel.
On the jet fuel front, September refiner sales were also proceeding similar to 10ppm sulphur diesel. South Korea’s refiners have so far sold at least five 300,000-barrel cargoes for next month’s loading.
Demand for the aviation fuel could remain firm from Taiwan next month given lowered production there from refinery maintenance.
Regrade narrowed slightly to around $1.55 a barrel, reflecting the weakness in gasoil markets in comparison to jet fuel.
SINGAPORE CASH DEALS
– No deals for gasoil or jet fuel
INVENTORIES
– U.S. crude oil and gasoline stockpiles were expected to have fallen last week, while distillate inventories likely rose, a preliminary Reuters poll showed on Monday.
REFINERY NEWS
– BP’s BP.L 440,000-bpd refinery in Whiting, Indiana, is expected to be fully operational in the next 24 to 48 hours, industry monitor IIR said on Monday.
NEWS
– Ukraine has stepped up drone attacks on Russian oil refineries and exporting infrastructure, striking the most important sector of President Vladimir Putin’s economy to show it can fight back as the United States seeks to broker a peace deal.
– Canada’s main oil-producing province of Alberta is considering a financial investment in Japan’s refining sector, two sources familiar with the matter said, an attempt to reduce its overwhelming dependence on top trade partner the United States for oil exports.
– Oil prices edged down on Tuesday after surging nearly 2% in the previous session, with traders keeping a close eye on developments surrounding the Ukraine war that could disrupt Russian fuel supplies.
Source: Reuters