Asia’s middle distillates cracking margins gave back earlier session gains on Tuesday and eased on thinner open-market spot liquidity as prompt tight supplies in the West could likely be offset by increasing exports from China in September.

Fresh offers emerged from at least two Asian refiners for September loading gasoil or jet fuel.

The market has been slightly overheated the past two days and players are waiting for a clearer supply direction in the West soon, one Singapore-based trading source said. The backwardation between September and October swaps narrowed by more than 20 cents.

Refining margins for 10 ppm sulphur gasoil GO10SGCKMc1 fell to slightly below $34 a barrel, while jet fuel refining margins JETSGCKMc1 fell to around $33 a barrel as a result.

Spot cash premiums GO10-SIN-DIF closed the trading session at $2.42 a barrel, almost unchanged from a day earlier as some prompt buying interest supported prices.

Regrade JETREG10SGMc1 narrowed to below $1 a barrel, reflecting the less bullish trading situation on the gasoil front.

SINGAPORE CASH DEALS O/AS

– One gasoil deal, no jet fuel deal.

INVENTORIES

– Analysts in a Reuters poll estimated stockpiles of gasoline USOILG=ECI were down by about 1.4 million barrels last week, while distillate stockpiles USOILD=ECI, which include diesel and heating oil, increased by about 100,000 barrels.

REFINERY NEWS REF/OUT

– Marathon Petroleum MPC.N is preparing a plan to begin restarting units at its 596,000-barrel-per-day (bpd) Garyville, Louisiana, refinery, the company said on Monday.

NEWS

– Kuwait’s Al Zour refinery has issued a fuel oil sales tender for the first time in more than two months, traders said on Tuesday.

– Oil prices slipped on Tuesday as worries that further possible U.S. interest rate hikes could pull down demand outweighed concerns that a tropical storm off the U.S. Gulf Coast may impact supply.
Source: Reuters (Reporting by Trixie Yap; Editing by Devika Syamnath)