The market structure for the middle distillates complex pared back from its recent strength, with timespreads narrowing for prompt-month contracts amid sell-offs.
Backwardation for both 10ppm sulphur gasoil and jet fuel narrowed to below 30 cents for the balance-Oct/Nov contract, based on LSEG data at the Asia close.
Spot differentials were also pegged lower amid the weaker market structure, after several sessions of uptick.
Some trades emerged for prompt 10ppm sulphur gasoil while offers for late-October dipped. The spot differential was pegged lower at a premium of 24 cents a barrel on Wednesday, after hitting a seven-month high on Tuesday.
Refining margins closed lower at $12.55 a barrel, as crude prices continued to climb day-on-day.
Regrade widened to a discount of 28 cents a barrel on Wednesday, according to LSEG data.
SINGAPORE CASH DEALS
– Two deals for gasoil, no deal for jet fuel
INVENTORIES
– U.S. distillate stockpiles, which include diesel and heating oil, fell 1.3 million barrels in the week ended Sept. 27 to 122 million barrels, compared with analysts’ expectations for a 1.54 million-barrel draw.
– Singapore’s middle distillates inventories rebounded to 10.74 million barrels after slumping last week, official data showed on Thursday.
NEWS
– A meeting of top OPEC+ ministers has kept oil output policy unchanged including a plan to start raising output from December, while also emphasising the need for some members to make further cuts to compensate for overproduction.
– French oil major TotalEnergies told investors on Wednesday it would focus on low-cost upstream production and signing oil-linked gas contracts to operate profitably and reward shareholders through 2030 as prices fall.
– Long lines of container ships queued up outside major U.S. ports on Thursday as the biggest dockworker strike in nearly half a century entered its third day preventing unloading and threatening shortages of everything from bananas to auto parts.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shreya Biswas)