Asia’s middle distillates recorded tepid trading activity and markets were little changed on Wednesday, with players expecting discussions to taper down even further in the next two days ahead of the holiday season.
Discussions were muted, with some traders taking a cautious stance ahead of the long holiday in some parts in northeast and southeast Asia.
Physical March cargoes were also not yet on offer from remaining northeast Asian refiners and may only end up be discussed a week later since the holidays have already started, one source said.
China-origin exports were estimated to be slightly higher for February-loading – above 900,000 metric tons compared with the earlier estimates of 700,000 tons-800,000 tons.
The increments were attributed to an incline in export margins in the past two weeks, compared with January, one China-based trade source said.
Refining margins GO10SGCKMc1 for 10ppm sulphur gasoil were steady slightly above $26 a barrel.
Cash premiums GO10-SIN-DIF in the open trading market were still under pressure, dipping 3 cents from the previous session, due to lower-priced offers from Trafigura for end-February and early March loading shipments.
Jet fuel refining margins JETSGCKMc1 were likewise almost steady, trending in line with gasoil cracks.
Shipping enquiries on the northeast Asia-U.S. west coast route from at least two oil majors were in the market, one shipbroking source said, owing to the opened arbitrage window for trades of some products including jet fuel.
Unexpected outages in the U.S. West Coast region, which could tighten supplies there, may lead to buying interest in northeast Asia soon for arbitrage trades, one refinery source said.
Exports from China were estimated at close to 2 million metric tons, one trade source said citing estimates from China-based consultancy Longzhong. It remains profitable for China majors to engage in export activity.
Regrade kept mostly steady as a result, but were still around a discount of $2.80 a barrel, with jet fuel swap prices supported by a portion of this arbitrage demand.
SINGAPORE CASH DEALS
– One 500ppm gasoil deal, no jet fuel deal.
INVENTORIES
– U.S. crude oil and gasoline inventories rose last week, while gasoline stockpiles fell, according to market sources citing American Petroleum Institute figures on Tuesday. API/S
REFINERY NEWS
– Rosneft-owned ROSN.MM Tuapse oil refinery on the Black Sea will not resume operations this month, at the very least, sources, familiar with the maintenance schedule, told Reuters on Tuesday.
– The Lukoil-owned LKOH.MM Volgograd oil refinery, the largest in southern Russia, is set to keep processing volumes steady despite damage inflicted by a drone attack by redistributing processing to undamaged units, two industry sources told Reuters on Tuesday.
NEWS
– The Belgian government aims to pass a law tightening the quality of exported fuels in the second half of March, the environment ministry told Reuters, as it targets a profitable trade of lower-quality gasoline and diesel from Northern Europe to West Africa.
– Oil prices were little changed on Wednesday as a bigger-than-expected increase in U.S. inventories outweighed the risk of potential supply disruptions in the Middle East amid the wider conflict in the region stemming from the Israel-Gaza war.
– India is expected to be the largest driver of global oil demand growth between 2023 and 2030, narrowly taking the lead from top importer China, the International Energy Agency (IEA) said on Wednesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Mrigank Dhaniwala)