Asia’s middle distillates markets recorded more upbeat spot discussions as window deals picked up, though cash differentials went back to nearly two-week lows, and June refiner sales emerged in line with earlier expectations.
Taiwan’s key spot seller Formosa Petrochemical Corp sought to sell both gasoil and jet fuel cargoes loading in June, with two more refiners likely to start discussions in the next few days.
Talks of some supply resumption in Japan following earlier unplanned refinery outages will probably add back some supplies into the market starting June.
Meanwhile, refining margins (GO10SGCKMc1) declined for a second straight session to below $15 a barrel.
The 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) dipped to its lowest since April 24, tracking a weaker market structure for derivative trades nearing mid-month, against a backdrop of lower-priced offers.
Front-month bids on the trading window, however, remained firm, capping overall weakness in the spot market.
June regrade – the spread between jet fuel and 10ppm sulphur gasoil – barely moved, steadying at a discount of slightly more than 60 cents per barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– U.S. crude oil and gasoline inventories fell last week while distillate stocks rose, market sources said, citing American Petroleum Institute figures on Tuesday.
– Middle distillates stockpiles held at Fujairah Oil Industry Zone dipped to a three-month low of 1.73 million barrels for the week ended May 5, according to industry information service S&P Global Commodity Insights.
NEWS
– Oil prices rose on Wednesday on signs of weakening production in the U.S. and higher demand in Europe and China as buyers emerged after prices fell to new lows earlier in the week.
– Perceptions of oversupply among oil market participants from increasing OPEC+ output and uncertainty about the economic impact of tariffs have raised short-term oil price volatility, the U.S. Energy Information Administration said on Tuesday.
– China’s Zhejiang Jiaao Enprotech 603822 said on Wednesday its east China-based subsidiary biofuel plant exported its first cargo of sustainable aviation fuel of 13,400 metric tons.
Source: Reuters