Asia’s middle distillates cracking margins hit a seven-month high on Monday, supported by worries of tighter supplies in the West on unexpected supply disruptions.
Despite positive news on the supply front, buying interest in the open trading market remained tepid and trading liquidity was minimal.
The emergence of more China-origin exports limited gains towards the close of the trading session, with at least one Chinese major offering more September spot lots.
Speculation on export quota announcements also capped overall gains in Asian cracks, with September-loading diesel loaders estimated at above 1 million metric tons, data compiled by consultancy Longzhong showed.
The east-west arbitrage for gasoil for October, represented by the exchange of futures for swaps (EFS), surged to a discount of more than $70 a ton – a seven-month high – as a result of the supply disparity in the two regions.
Refining margins for 10ppm sulphur gasoil climbed to around $36 a barrel, while jet fuel margins breached the $35 level.
Spot cash premiums also rose to $2.41 a barrel, tracking the market’s wider backwardation, despite a lack of activity.
Regrade still traded within the $1 a barrel range, almost steady from the previous close as strong sales from China refiners provided support from the demand front to market participants.
SINGAPORE CASH DEALS O/AS
– No deals for gasoil or jet fuel.
NEWS
– Chinese refining giant Sinopec Corp 0386.HK plans to maintain steady refinery output during the second half of 2023 as domestic fuel demand recovers, after reporting a 20% decline in interim profit because of lower crude oil prices.
– China’s Sinopec Corp 0386.HK is not interested in acquiring Shell’s refinery or petrochemical plant in Singapore, Sinopec President Yu Baocai said on Monday.
– A storage tank fire at a Marathon Petroleum oil refinery that had triggered a temporary evacuation of area residents a day ago continued to smolder on Saturday, a spokesperson said.
Source: Reuters (Reporting by Trixie Yap; Editing by Varun H K)