Asia’s 10 ppm sulphur gasoil cash differentials fell on Wednesday for a second consecutive session, owing to limited spot trading liquidity with buyers by the sidelines – despite some ready offers in the open trading market.
Cash differentials GO10-SIN-DIF fell to 81 cents a barrel, with buyers absent as they mulled their physical cargo requirements for second-half July, against a backdrop of rising supplies as the market enters August.
Likewise, refining margins for 10 ppm sulphur gasoil GO10SGCKMc1 fell to $17.66 a barrel, with more paper swap sellers and only one buyer.
Jet fuel refining margins JETSGCKMc1 recovered slightly, as a portion of the market believed prices to have been oversold earlier – given the healthier demand-supply fundamentals compared with gasoil.
Regrade JETREG10SGMc1 narrowed back to below $2 a barrel as a result.
SINGAPORE CASH DEALS O/AS
– No gasoil or jet fuel deal.
INVENTORIES
– U.S. crude oil and gasoline inventories fell last week, while distillate inventories rose, according to market sources citing American Petroleum Institute figures on Tuesday. Crude stocks fell by about 2.4 million barrels in the week ended June 23, according to the sources, who spoke on condition of anonymity. Gasoline inventories fell by about 2.9 million barrels, while distillate inventories rose by about 780,000.
– Middle distillates stock levels held at key trading hub Singapore rebounded and were close to 8 million barrels as the pace of exports slowed down and more imports flowed into the country, official data showed on Wednesday. O/SING1
NEWS
– Chinese refiners are likely to increase diesel exports sharply from late June into July to cash in on higher cash premiums and margins in recent weeks after keeping shipments steady in the previous two months, traders and analysts said.
– Indonesian state energy company PT Pertamina plans to begin producing bioethanol from sugarcane and cassava this year and has also begun production of green hydrogen using geothermal energy, its CEO told a conference on Wednesday.
– Profits at China’s industrial firms tumbled 18.8% year-on-year in the first five months of 2023, data showed on Wednesday, as companies were hit hard by a squeeze in margins from softening demand amid a stumbling post-COVID economic recovery.
– Russia’s energy ministry said it sees no shortage of gasoline in the domestic market, with companies having cut their exports and increased production after gradually completing planned maintenance work. Diesel fuel production at the end of June was 2% higher than in the same period last year, and stocks are at a historical high, the energy ministry added.
– The monthly price spreads for Brent crude futures are facing significant headwinds from the current higher interest rate environment and recessionary fears, Goldman Sachs analysts said.
– Oil prices edged higher on Wednesday after industry data showed a larger-than-expected drawdown of U.S. inventories signalling robust demand from the world’s biggest oil consumer, but the gains were limited by worries over interest rate hikes.
Source: Reuters (Reporting by Trixie Yap; Editing by Varun H K)