Asia’s middle distillates’ market activity centered around July spot refiner sales, against a backdrop of more unplanned supply outages in Japan, while spot premiums hit three-week highs.
July refiner sales for diesel was the market’s focus this week, with at least three major northeast Asian refiners kickstarting discussions – though deals done were mostly still in discounted territory linked to free on board (FOB) Singapore quotes.
At least three 300,000-barrel and two 750,000-barrel cargoes of 10ppm sulphur gasoil and two 500ppm sulphur gasoil cargoes of 300,000 barrels each were sold via tenders or private discussions.
Buying interest was mixed across the regions, though some cautiousness remained on slowing demand in a few regions amid monsoon season.
For jet fuel, activity was slightly more muted though the emergence of some east-west arbitrage flows did perk up the market slightly and offset weakness from the closed Asian arbitrage window to the U.S west coast.
Refining margins barely moved week on week, closing the week slightly below $16 a barrel.
On the trading window, spot deals were mostly at premiums of 40-60 cents per barrel in the week, with cash differentials (GO10-SIN-DIF) closing 58% higher week on week and at a three week high.
Regrade (JETREG10SGMc1) held its ground at discounts of around $1.20 a barrel.
SINGAPORE CASH DEALS
– Two gasoil deals, no jet fuel deal
INVENTORIES
– Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub, which include diesel, rose nearly 1% to 2 million tonnes, data from Dutch consultancy Insights Global showed on Thursday.
REFINERY NEWS
– Japanese oil refiner Idemitsu Kosan 5019 shut the 155,000 barrels-per-day No.3 crude distillation unit (CDU) at its Yokkaichi refinery in central Japan on May 19 for scheduled maintenance, a company spokesperson said on Friday.
– Irving Oil said on Thursday it plans to invest $100 million to upgrade a key crude oil processing unit at its 320,000 barrel-per-day Saint John facility in New Brunswick, Canada’s largest refinery.
NEWS
– Growth in China’s exports likely slowed in May despite a lowering of U.S. tariffs on Chinese goods, as the fallout from the still-unresolved trade war and uncertainties in Sino-U.S. ties weighed on shipments.
Source: Reuters