Asia’s middle distillates markets remained thinly discussed on the trading window as traders mulled August supply balances amid a shaky east-west price spread.
August spot sales slowed slightly, but some traders said some discussions could be done privately, contributing to the lack of overall sale tenders.
Sentiment turned slightly cautious as traders were skeptical on how much the Europe region can take in from swing suppliers for July, given that almost all export volumes could be headed there.
Swing supply flows could turn back to Asia to seek comfort by the end of this month, two trade sources said, adding on to regional supply balances.
The east-west spread for August remained narrower than a discount of $40 per ton in the past three trading sessions, with some traders deeming this number to possibly be more profitable for sellers to send cargoes east instead of west.
On the trading window, deals for 10ppm sulphur gasoil were absent for a third straight trading session. Cash differentials (GO10-SIN-DIF) edged down to $1.37 a barrel, reflecting the weaker paper market structure.
Meanwhile, refining margins for 10ppm sulphur gasoil closed the trading session slightly firmer at around $20.3 a barrel.
For jet fuel, cargo flows on the east-west route are still likely to materalise given the length in regional supplies and open arbitrage windows.
However, regrade (JETREG10SGMc1) widened back to discounts of slightly more than $1.9 a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Middle distillates stocks held at Fujairah Oil Industry Zone gained to a two-week high of 2.593 million barrels in the week ended July 14, according to industry information service S&P Global Commodity Insights.
REFINERY NEWS
– Repairs were continuing on Tuesday to a diesel-producing hydrocracker at Marathon Petroleum’s MPC 631,000-barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, people familiar with plant operations said.
NEWS
– OPEC said the global economy may perform better than expected in the second half of the year despite trade conflicts and that refineries’ crude intake would remain elevated to meet the uptick in summer travel, helping to support the demand outlook.
– Indonesia, Southeast Asia’s largest economy, has committed to purchasing 50 Boeing BA jets, $15 billion in U.S. energy and $4.5 billion in U.S. agricultural products as part of its trade agreement with the U.S., Trump said.
– Lower prices for oil and liquefied natural gas will weigh on French oil major TotalEnergies’ second-quarter earnings, even as its hydrocarbon production rose slightly, it said in a trading update on Wednesday.
Source: Reuters