Asia’s middle distillates markets were slightly up on Monday as deals continued to be done on the trading window, while front-month prices remained supported by the strength in paper markets and wider timespreads.
Support came mostly from a firmer east-west price spread, with values hitting a nearly 1.5-year wide levels as front month ICE gasoil futures were firmly supported by tight supply fundamentals.
This will likely encourage swing barrels to pivot west in the near-term, hopefully supporting Asia’s supply-demand balance for July, one trade source said.
Meanwhile, August spot sale discussions continued to tick up, with more refiners starting their offers.
Refining margins (GO10SGCKMc1) ticked up slightly to almost $21 a barrel, just shy of hitting three-week high levels.
On the trading window, activity was upbeat and the 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) were supported, gaining to $1.28 a barrel – amid a firmer market structure.
The east-west price spreads for jet fuel were still considerably lucrative for traders to engage in discussions on this trade route, while the spread between Asia and U.S. west coast prices remained at more than $15 per barrel.
However cash differentials for aviation fuel remained under pressure as paper market structure weakened significantly and remained flat from the previous trading session.
Regrade (JETREG10SGMc1) for August narrowed slightly to $1.50 a barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal
REFINERY NEWS
– Britain’s insolvent Lindsey oil refinery faces shutdown within three weeks with the current 1.8 million barrels of crude it has in storage, consultancy Wood Mackenzie told Reuters on Friday.
NEWS
– Saudi Arabia, the world’s biggest oil exporter, on Sunday hiked August prices for Asian and European buyers by more than $1 a barrel as domestic crude demand is expected to rise, reducing exports, and consumption from China is likely to increase.
– OPEC+ oil producers are set to approve another big output boost for September as they complete both the unwinding of voluntary production cuts by eight members and the United Arab Emirates’ move to a larger quota, five sources said.
– OPEC+ agreed on Saturday to raise production by 548,000 barrels per day in August, further accelerating output increases at its first meeting since oil prices jumped – and then retreated – following Israeli and U.S. attacks on Iran.
Source: Reuters