Asia’s spot premiums for low-sulphur diesel extended losses for the fourth consecutive trading session, erasing gains made in the past two weeks, and fell to 85 cents a barrel on persistently strong selling interest in the market.
At least four major trading houses offered August spot lots in the open trading market, with a handful of refineries also offering more August spot cargoes from South Asia and the Middle East, weighing further on discussion levels.
Gains in the ICE gasoil futures market, however, capped the overall market weakness and propped refining margins GO10SGCKMc1 up slightly to $19.52 a barrel – against a backdrop of limited oil futures movement.
Jet fuel open-market activity was thin given a lack of direction after arbitrage selling remained uneconomical to the US and northwest Europe markets. Refining margins JETSGCKMc1 for the aviation fuel trended in-line with gasoil.
On the selling front, market participants believed that South Korea’s GS Caltex GSCAI.UL sold two August-loading lots at a premium between 30 cents and 50 cents a barrel either to Australia or the West.
Regrade JETREG10SGMc1 remained almost steady at around a discount of $1.60 a barrel as a result.
SINGAPORE CASH DEALS O/AS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– Analysts polled by Reuters estimated stockpiles of gasoline USOILG=ECI were down by about 2.1 million barrels last week, while distillate stockpiles USOILD=ECI, which include diesel and heating oil, decreased by about 100,000 barrels. EIA/S
NEWS
– Venezuela’s state-run oil company PDVSA restarted a key fuel-making unit at its largest refinery over the weekend, which should ease gasoline shortages in the country’s western region, five sources close to operations said on Monday.
– A group of refiners plan to file a lawsuit challenging the Biden administration’s rejection of waivers to exempt oil refiners from biofuel blending mandates which has left some on the hook for hundreds of millions of dollars, Par Pacific told Reuters on Monday.
– Russia will reduce its oil exports by 2.1 million tons in the third quarter in line with planned voluntary export cuts of 500,000 barrels per day in August, its energy ministry said on Monday.
– Oil prices inched upwards in Asian trade on Tuesday as investors eyed a possible tightening of U.S. crude supplies, after sinking in the previous session on weaker-than-expected Chinese economic growth.
– China’s diesel exports fell to the lowest level in more than a year in June as refiners curbed production in favour of more lucrative gasoline and aviation fuels.
– Thailand will maintain the price of diesel at 32 baht ($0.93) per litre to help alleviate the energy price impact on the public after an excise tax reduction ends this week, its oil fund said on Tuesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Sonia Cheema)