The pace of trading momentum in Asia’s middle distillates markets rose as more sellers emerged from the sidelines with spot January lots, with mixed outlooks on the Red Sea shipping route also affecting market movements.
The Red Sea attacks could have bumped up the futures market earlier and contributed to some sentiment support, but in fact fundamentals are still cautious to bearish, one refinery source said.
South Korea’s GS Caltex offered at least six lot of 10 ppm sulphur gasoil, further supporting earlier expectations of ample supply for January loading.
The remaining refiners are all likely to have similar volumes for February as well, compared with January, a second source said.
There is a worry of China’s export volumes for January being higher than December as well, the source said.
Refining margins GO10SGCKMc1 for the fuel rose by more than 4% day on day, but activity in the swaps market was minimal and thin.
Spot cash premiums GO10-SIN-DIF fell reflecting the narrower backwardation between January and February swaps prices, with a buy-sell gap hampering trading activity as well.
Jet fuel refining margins JETSGCKMc1 moved in tandem with gasoil with limited activity driving movements, given the closed east-west arbitrage for a second straight week to the U.S. West Coast.
SINGAPORE CASH DEALS O/AS
– No deals
INVENTORIES
– Analysts in a Reuters poll estimated stockpiles of gasoline USOILG=ECI were up by about 1.7 million barrels last week, and distillate stockpiles USOILD=ECI, which include diesel and heating oil, were seen increasing by about 1 million barrels.
NEWS
– Oil prices were little changed on Tuesday as investors eyed the impact on oil supply after attacks by Yemen’s Iran-aligned Houthi militants on ships in the Red Sea disrupted maritime trade and forced companies to reroute vessels.
– Russia’s Baltic port of Primorsk resumed loadings on Tuesday after scheduled maintenance closed the terminal for five days, two traders said and LSEG data showed.
– A number of container ships are anchored in the Red Sea and others have turned off tracking systems as traders adjust routes and prices in response to maritime attacks by Yemen’s Iran-aligned Houthis on the world’s main East-West trade route.
Source: Reuters (Reporting by Trixie Yap; Editing by Arun Koyyur)