Asia’s 10 ppm sulphur gasoil refining margins rose for the third consecutive session to $19.91 a barrel, a new high since end-March, tracking the continuous ICE gasoil futures gains despite mixed outlooks on physical market fundamentals.
“There has been revived speculative interest in middle distillates recently… This buying has been driven by a combination of fresh longs as well as short covering,” ING analysts said in a client note.
“Clearly, sentiment in the market has shifted quite drastically, and this is not too surprising when looking at the drawdown in ARA gasoil inventories in recent weeks.”
Spot premiums for 10ppm sulphur gasoil GO10-SIN-DIF rebounded to 89 cents a barrel despite numerous spot sellers in the market as one key major scooped up all the cargoes for early August deliveries. Open bids were scant, however.
On the tender results front, Taiwan’s CPC Corp sold a second-half August loading lot at a premium of 40-45 cents a barrel linked to Singapore quotes.
Jet fuel refining margins JETSGCKMc1 likewise tracked the firmness in gasoil cracks, closing the session at $18.26 a barrel.
The arbitrage between Asia and the U.S. West Coast, and between Asia and northwest Europe, remained narrow and discussions were still minimal owing to delivery and price spread trading risks.
On the selling front, there was talk of South Korean refiner SK Energy selling at least one more August-loading parcel via a private tender at around flat to Singapore quotes. Buyer details could not be confirmed.
Regrade JETREG10SGMc1 kept almost steady at a discount of near $1.60 a barrel.
SINGAPORE CASH DEALS O/AS
– Three gasoil deals, no jet fuel deal.
INVENTORIES
– U.S. crude oil, gasoline and distillate inventories all fell last week, according to market sources citing American Petroleum Institute figures on Tuesday. Crude stocks fell by about 800,000 barrels in the week ended July 14, according to the sources, who spoke on the condition of anonymity. Gasoline inventories fell by about 2.8 million barrels, while distillate inventories fell by about 100,000 barrels.
– Middle distillate stockpiles at Fujairah Oil Industry Zone were down about 12% at 2.83 million barrels for the week ended July 17, according to industry information service S&P Global Commodity Insights.
NEWS
– Vietnam has approved a plan to expand its national fuel storage capacity by 2030, with investment of up to 270 trillion dong ($11.4 billion).
– Australian fuel retailer Ampol Ltd ALD.AX saw its group total fuel sales volume rise by nearly a quarter in the first half and beat estimates on a key earnings metric, lifting its shares to their highest in nearly six weeks.
– Full output has resumed at the Mongstad oil refinery in Norway, operator Equinor EQNR.OL said on Wednesday, following a partial outage on July 12 due to a lightning strike near the plant.
Source: Reuters (Reporting by Trixie Yap; Editing by Shilpi Majumdar)