Asia’s middle distillates markets continued a slight downward price trajectory on Thursday, reflecting the weakness in paper markets, while December discussions are expected to gain momentum in the next few trading sessions.
Window trading activity was upbeat despite price weakness and slightly thinner swaps activity, as evidenced by the deals and overall number of bids and offers.
Gasoil term offers surfaced from Formosa Petchem, one of Asia’s key suppliers, while spot discussions for December were still underway.
Meanwhile, on the jet fuel front, discussions slowed in the open trading window, but ready cheap offers pressured cash premiums to 58 cents a barrel.
Swing suppliers are still directing their cargoes into the east of Suez markets for jet fuel in November, two trade sources said.
Refining margins GO10SGCKMc1 for 10ppm sulphur gasoil declined below $15 a barrel, tracking the drops in swaps discussion levels.
Cash differentials GO10-SIN-DIF for the fuel fell for the second straight session to almost $1 a barrel, reflecting the consistently lower offers on window and a lack of strong buying interest.
Regrade JETREG10SGMc1 declined, reversing the gains from the previous session, to close at a premium of 73 cents a barrel.
SINGAPORE CASH DEALS O/AS
– Two gasoil deals, no jet fuel deal
INVENTORIES
– U.S. crude oil stockpiles rose last week as exports declined, while fuel inventories also grew on weaker demand despite record product exports, the U.S. Energy Information Administration (EIA) said on Wednesday.
– Singapore’s middle distillates stocks climbed for the second straight week, as the fall in diesel/gasoil net exports offset slight gains in jet fuel/kerosene net exports, official data showed on Thursday.
NEWS
– Indonesia’s chief economic minister said he is confident palm oil production can be increased in coming years to meet the country’s rising demand for energy as the mandatory biodiesel blend is poised to expand.
– Data showed China’s crude oil imports fell 9% in October, a sixth consecutive monthly year-on-year decline as a plant closure at a state oil refinery added to weaker demand from independent refiners.
– India’s fuel consumption in October rose by 2.9% year-on-year to 20.04 million metric tons, oil ministry data showed on Wednesday, driven by strong economic activity.
– Oil prices ticked up, following a sell-off triggered by the U.S. presidential election, as risks to oil supply from a Trump presidency and a hurricane building in the Gulf Coast outweighed a stronger dollar and lower crude imports in top importer China.
– China faces a squeeze on supplies of cheap Iranian crude, which make up about 13% of imports by the world’s biggest buyer of oil, if Donald Trump ramps up enforcement of sanctions on Tehran after his return as U.S. president in January.
Source: Reuters (Reporting by Trixie Yap; Editing by Savio D’Souza)