Asia’s middle distillates market structure firmed further as front-month prices received support from bullish near-term supply-demand fundamentals, with China barrels being offered through the week for May shipment.
Talks of tightening supplies remained a supportive market driver, with some northeast Asian suppliers likely to defer their May deliveries given production hiccups.
There may be some replenishment demand instead as well within northeast Asia itself, which could further clamp down on spot availability, one of the sources added.
Spot sales for China-origin barrels loading May were the talk of the town this week, with at least three exporters selling 4-5 cargoes in the discounted territory.
Jet fuel cargoes were mostly sold at discounts of 50 cents to $1 per barrel, while 10ppm sulphur gasoil cargoes were sold at discounts of 20-30 cents per barrel, with these floating prices linked to free on board Singapore basis markets.
Refining margins (GO10SGCKMc1) gained to slightly more than a one-month high of around $15 a barrel given the firm paper markets.
On the trading window, bids continued to firm up reflecting the strength in buying interest and a wider paper market backwardation, with cash differentials (GO10-SIN-DIF) holding at three-month highs of around 87 cents per barrel.
Regrade (JETREG10SGMc1) widened slightly to discounts of around 80 cents per barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Gasoline stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by 8% on the week to their lowest since November 2024, data from Dutch consultancy Insights Global showed on Thursday.
REFINERY NEWS
– Valero Energy VLO.N on Thursday said it would cease operations at its 170,000-barrel-per-day San Francisco-area oil refinery next year amid worries about California’s declining fuel supplies and high gasoline prices.
– TotalEnergies TTEF.PA 238,000-barrel-per-day (bpd) Port Arthur, Texas, refinery returned to normal operation on Thursday, hours after losing steam supply earlier in the day, said people familiar with plant operations.
NEWS
– Valero Energy Corp’s VLO.N license to import fuel into Mexico was reinstated following a suspension in early April, Chief Operating Officer Gary Simmons told analysts on the U.S. refiner’s first-quarter earnings conference call.
– Oil prices rose for a second session on Friday buoyed by potential de-escalation of the U.S.-China trade war, but the market was headed for a weekly decline of around 2% amid concerns about oversupply.
– Sri Lanka will start work next month on plans to develop an energy hub with India and the United Arab Emirates, the energy minister said on Friday, as the nation looks to leverage its strategic location to cement a recovery from a financial crisis.
Source: Reuters