Asia’s middle distillates markets brimmed with spot activity in the open window as key major Trafigura bought up three cargoes, with more spot offers from key refiners expected to emerge this week again.
Trafigura scooped up 550,000 barrels of cargoes in the open trading market for end-July to August shipments.
Also, traders were waiting for China’s oil majors to come up with their August export sales plan, given the recent firmness in export margins
Meanwhile, cargoes from Russia are likely to turn more prevalent in July to regional markets such as Singapore and Malaysia as refiners there resume production after maintenance season and repairs, adding to ample regional supplies.
Refining margins were little changed at around $16.3 a barrel.
Cash differentials rose and discount levels declined to around 15 cents a barrel as the market’s contango structure narrowed slightly, with strong buying interest readily available for prompt loading cargoes.
Jet fuel paper swaps continued to trade lower than gasoil paper swaps, though levels remain slightly higher than year-ago levels, LSEG pricing data showed.
Regrade closed the trading session
The lack of arbitrage price differences between Asia and some west of Suez markets continued to weigh on discussion levels, though some traders are expecting regional demand to remain boosted in the near term on summer travel demand.
Key oil major GS Caltex kickstarted itsAugust spot discussions by offering at least three cargoes, encouraging a slight uptick in trading activity, though the likely discussion levels could remain in discounts, two trade sources said.
SINGAPORE CASH DEALS
– Three 10ppm gasoil deals, no jet fuel deal
REFINERY NEWS
– TotalEnergies TTEF.PA shut down its 238,000 barrel-per-day (bpd) Port Arthur, Texas refinery due to the loss of steam supply, as per a regulatory filing on Saturday.
NEWS
– Oil held its ground on Monday, with political uncertainty in the United States and the Middle East supporting prices, offsetting downward pressure from a stronger dollar and weak demand in top importer China.
– Nigerian state-owned oil firm NNPC shareholding in Dangote refinery has been whittled down to 7.2% from 20% after failing to pay the balance of funding owed, Aliko Dangote, the refinery’s owner, told the BusinessDay newspaper.
– Official data showed on MondayChina’s refinery output fell 3.7% in June from a year earlier, down for a third month amid planned maintenance, while lower processing margins and lacklustre fuel demand pushed independent plants to cut output.
– Brent crude oil has been trading in a tight range of $75-$90 a barrel since late 2022 as OPEC+ cuts keep a floor under prices, while sizeable spare capacity, demand uncertainty and sanctions policy prevent the market frombreaking higher.
– China’s economy grew much slower than expected in the second quarter, as a protracted property downturn and job insecurity knocked the wind out of a fragile recovery, keeping alive expectations Beijing will need to unleash even more stimulus.
Source: Reuters (Reporting by Trixie Yap; Editing by Shreya Biswas)