Asia’s middle distillates markets were mixed for the second straight session as traders weighed some build-ups in stockpiles in the West against possible supply disruptions regionally and strong prompt demand in the open trading market, with jet fuel physical deals continuing.
The swaps market surged in the late afternoon on talks of a possible supply disruption, following ongoing checks at one southeast Asian refinery’s middle distillates production unit. Further details could not be confirmed.
However, trading sentiment was earlier weighed on by a large build in U.S. stockpiles and overall, continuous talks of ample supplies within Asia for February loading.
Spot cash premiums GO10-SIN-DIF climbed in response to the wider January-February market backwardation, with some end-January buyers still seeking for cargoes as well.
Lower-priced sellers were scant in the afternoon owing to a lack of clarity on short-term supplies given the potential outage in southeast Asia, amid a drop in Singapore commercial stockpiles.
Refining margins GO10SGCKMc1 for the fuel closed the trading session at around $22.2 a barrel.
Jet fuel refining margins JETSGCKMc1 fell slightly by more than 1% from the previous session amid thin trade.
Regrade JETREG10SGMc1 declined further to a discount of 70 cents a barrel as a reflection of the strength in prompt gasoil swap prices and limited direction for jet fuel outlook.
SINGAPORE CASH DEALS O/AS
– No gasoil deal, one jet fuel deal.
INVENTORIES
– U.S. distillate stockpiles USOILD=ECI, which include diesel and heating oil, rose by 6.5 million barrels in the week to 132.4 million barrels, their highest since September 2021, EIA data showed.
– Singapore’s middle distillates stockpiles hit a five-month low as higher jet fuel/kerosene exports outweighed declines in gasoil/diesel exports, official data showed on Thursday.
NEWS
– Total fuel and crude stocks held by European refiners stood at 1.002 billion barrels in December, down by a marginal 0.3% on the month and steeper 2.1% on the year, Euroilstock data showed on Wednesday.
– An oil tanker caught up in a dispute last year between the United States and Iran was boarded by armed individuals off the coast of Oman on Thursday and appeared to have changed course towards Iran, according to UK maritime sources.
– Oil prices rose on Thursday after an oil tanker was boarded by an armed group in Oman, raising the prospect of escalating conflict in the Middle East.
– Chinese and other Asian refiners only asked for similar volumes of Saudi crude oil for February compared with January, people with knowledge of the matter said on Thursday, after the world’s top oil exporter cut its prices by the most in 13 months.
Source: Reuters (Reporting by Trixie Yap)