Asia’s middle distillates market momentum was mostly choppy through the trading week, though bearish supply-demand stayed as a prevailing theme ahead of more October refiner sales in the coming days.

Markets are still being discussed at discounts both on the window and on a spot front, two trade sources said, signalling a lack of stronger buying interest near-term.

October spot sales for both jet fuel and gasoil were slowly gaining momentum, with at least two more refiners from South Korea issuing their sale tenders.

Trafigura resumed buying activities on the open trading window, procuring end-September to early October cargoes.

Meanwhile, jet fuel markets could find a silver lining regionally until October due to shortcovering demand and stock replenishment from some importers amid refinery maintenance, especially in southeast Asia.

However, gains are likely to be capped by a closed arbitrage window to the west, one trade source said.

Analysts were also expecting the middle distillates complex to have bottomed out in the near-term.

Refining margins for 10ppm sulphur gasoil closed the trading session at $12.30 per barrel, down by almost $1.50 a barrel as Friday derivative markets posted further declines despite oil gains.

Spot market discounts for the fuel continued to hover at its four-year low mark of 61 cents a barrel, but activity was slightly muted compared with a week earlier.

Regrade closed at the week’s low of 30 cents a barrel, dipping 25 cents from a week earlier owing to slightly stronger rebounds in gasoil performance and cautiousness if Asian demand will be strong enough to buoy markets.

SINGAPORE CASH DEALS

– One 10ppm gasoil deal, no jet fuel deal

INVENTORIES

– Independently held refined oil products stocks in storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose by 1.7% in the week to Thursday, data from Dutch consultancy Insights Global showed.

REFINERY NEWS

– Six oil refineries in Louisiana in the path of Hurricane Francine began recovering on Thursday from the storm’s passage overnight, companies and sources familiar with operations at the plants said.

NEWS

– Indonesia plans to upgrade the quality of subsidised and polluting fuels, while also selling them to fewer vehicles, in a bid to improve the air quality in the capital Jakarta and other big cities, a senior government official said.

– Russia’s offline primary oil refining capacity is set to jump 34% in September from August, according to Reuters calculations based on data from industry sources, due to technical outages, Ukrainian drone attacks, and seasonal maintenance.
Source: Reuters (Reporting by Trixie Yap; Editing by Maju Samuel)