Asia’s middle distillates markets recorded a slight uptick in spot and derivative price activity, especially on the jet fuel front, with prompt paper swaps rebounding and well-supported by a rise in buying interest.
October swaps for jet fuel and 10ppm sulphur gasoil were both strong from the previous trading session, with the October-November price structures almost at flat for both fuel products.
Refining margins bounced back to slightly above $12 a barrel, gaining more than $1.50 a barrel from the previous session, as buyers came back into the swap markets.
The 10ppm sulphur gasoil cash differentials gained slightly, with discounts narrowing by 3 cents from the previous session to 45 cents a barrel, though a buy-sell gap hindered activity.
Free-on-board (FOB) jet fuel spot trades on the window resumed after three sessions of lull, with trader UIT buying more early October cargoes. The regional trader bought around 924,000 barrels of end-Sept-early Oct loading cargoes so far, Reuters records showed.
Spot refiner offers for October jet fuel remained scant, likewise the past two trading sessions, puzzling some traders given the better regrade performance in comparison. A positive regrade incentivises refiners to sell more jet fuel instead of gasoil usually.
Regrade ended the trading session at 12 cents a barrel, little changed from the previous close.
SINGAPORE CASH DEALS
– No gasoil deal, one jet fuel deal.
INVENTORIES
– U.S. crude oil and gasoline inventories fell while distillates rose last week, according to market sources citing American Petroleum Institute figures on Tuesday.
– Middle distillates inventories held at Fujairah Oil Industry Zone were at 3.046 million barrels, down 100,000 barrels week on week, as of Sept. 16, according to data from S&P Global.
REFINERY NEWS
– Shell SHEL.L said it would start maintenance on seven of the more than 60 plants at its Dutch Pernis site – which is among the largest integrated refinery and chemicals manufacturing sites in Europe – in the last week of September.
NEWS
– The Biden administration will seek up to 6 million barrels of oil for the Strategic Petroleum Reserve, a source familiar with issue said on Tuesday, a purchase that if completed will match its largest yet in the replenishment of the stash after a historic sale in 2022.
– China’s gasoline exports were down 44% in August from a year earlier while those of diesel fell 29.7%, customs data showed on Wednesday, due to lower refinery output and softening export margins.
– Russian insurers are playing a growing role facilitating the country’s oil shipments to India, its biggest buyer, data obtained from trade and shipping sources shows, helping to protect Moscow’s export revenue despite western sanctions.
– Russia may hold off oil export cuts for its western ports in October or even increase loadings, despite scheduled rise of available primary oil refining capacity at local oil plants which enables Moscow to boost crude runs, market sources said.
Source: Reuters (Reporting by Trixie Yap; Editing by Shreya Biswas)