Asia’s middle distillates’ physical markets recorded a flurry of prompt end-August spot activity, but bleak supply fundamentals expected into September capped overall gains and with little change in the margins.
Top trading house Trafigura continued its buying spree for a second straight session, procuring up to 300,000 barrels of end-August free-on-board (FOB) cargoes. So far, up to 900,000 barrels for second-half August shipment and up to 1 million barrels for first-half August loading have been purchased by Trafigura, Reuters records showed.
Meanwhile, on a sales tender basis, at least two northeast Asia-based refiners were offering mid- to second-half August loading 10ppm sulphur gasoil.
Meanwhile, talks of some traders wanting to charter very large crude carriers to ship diesel out of Asia – for August – resurfaced again in the market, though exact details could not be confirmed.
Refining margins were little changed from the previous trading session at around $17 a barrel.
Cash differentials slipped further into a deeper discount of 32 cents a barrel, reflecting the deals done and ready offers from some traders for August cargoes.
Jet fuel markets were comparatively quieter, with some traders still waiting for a direction on September refiner spot sales, though demand looks more lacklustre than before during the summer travel season.
“Global jet demand has recovered from the COVID lows, mostly thanks to a big uplift in domestic air tourism. Yet international passenger travel demand has lagged in both the US and China as geopolitical and pandemic factors have contributed to slow down the recovery in global tourism,” said BofA analyst Francisco Blanch in a client note.
Regrade narrowed slightly to a discount of 80 cents a barrel, but remained thinly discussed in the open trading market.
SINGAPORE CASH DEALS
– Three gasoil deals, no jet fuel deals.
INVENTORIES
– U.S. crude and distillates stockpiles were expected to have risen last week, while gasoline inventories likely drew down, a preliminary Reuters poll showed on Monday.
REFINERY NEWS REF
– Motiva Enterprises shut the gasoline-producing fluidic catalytic cracker (FCC) at its 626,000-barrel-per-day (bpd) Port Arthur, Texas, refinery on Monday, after a leak developed during a restart attempt, people familiar with plant operations said.
NEWS
– Oil giant Saudi Aramco on Tuesday reported a 3.4% fall in second-quarter profit on lower crude volumes and softer refining margins.
– Oil production at Libya’s Sharara field, one of the country’s largest production areas, has been reduced by 60,000 barrels a day, or about 20% of its capacity, due to ongoing protests in the area, two field engineers said on Monday.
– Oil prices pared gains in volatile trade on Tuesday as fears of an escalation in the Middle East conflict and a drop in production at Libya’s largest Sharara oilfield raised the prospect of tight supplies.
– A string of dramatic revisions to official U.S. oil consumption data have unnerved market participants who rely on the figures to trade.
Source: Reuters (Reporting by Trixie Yap; Editing by Vijay Kishore)