Asia’s middle distillates’ trading window turned slightly quiet, but a flurry of buy-sell activity on the tenders front regionally kept market activity upbeat and 10ppm sulphur gasoil premiums posted their fourth straight week of gain.
More spot tenders emerged for prompt January cargoes, with Pertamina seeking 2500ppm sulphur gasoil and China refiners continuing their jet fuel sales in line with earlier expectations.
Talks of refinery troubles at some of Pertamina’s refining sites, in addition to some earlier scheduled maintenance, could have resulted in some of the prompt procurement activity, one source said.
The paper markets’ backwardated price structure widened from the previous session, reflecting January price strength.
However, worries that jet fuel markets may continue to come under pressure in the near term were mildly prevalent, given ample supplies and minimal east-northwest Europe arbitrage trade flows. Singapore’s December imports also likely hit multi-year highs.
The continuously open arbitrage window between Asia and the U.S. west coast, however, capped overall weakness, though cargo flows there were yet to be seen.
Weakness in diesel markets was mostly attributed to the buildup in stockpiles both in the U.S. and in the northwest Europe region, though Asian supplies are still slated to be ample given rising crude runs in most of northeast Asia.
Refining margins (GO10SGCKMc1) bounced back to above $16 a barrel, gaining for the first time in three weeks.
Cash differentials for 10ppm sulphur gasoil (GO10-SIN-DIF) gained by 10 cents a barrel from the previous session, reflecting the wider backwardated price structure in paper markets – though window activity thoroughly lacked offers. Premiums have risen for four consecutive weeks.
Regrade (JETREG10SGMc1) widened slightly to a discount of $1.6 a barrel, though this level was considered little changed week on week.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose by over 13% on the week to their highest in 15 weeks, data from Dutch consultancy Insights Global showed.
– U.S. crude stocks fell while gasoline and distillate inventories rose sharply as demand weakened in the week ending December 27, the Energy Information Administration (EIA) said on Thursday.
NEWS
– Top oil exporter Saudi Arabia may raise crude prices for Asian buyers in February for the first time in three months, tracking gains in Middle East benchmark prices last month, traders said on Thursday.
– Indonesian companies will get a 1-1/2 month transition period to meet the new B40 biodiesel requirement, Deputy Energy and Mineral Resources Minister Yuliot Tanjung told reporters on Friday.
– Russian oil product exports from the Black Sea port of Tuapse are set to fall to 798,000 metric tons in January, down 9.8% from the 885,000 tons scheduled for December, two traders said on Friday.
Source: Reuters