Asia’s middle distillates markets recorded more brisk trading activity and discussions as a flurry of November spot tenders emerged from at least three regional producers and the east-west arbitrage widened to a one-month high.
Regional demand also ticked up slightly, with at least two southeast Asian buyers in the market for November deliveries as some refinery maintenance plans are set to be in place until December.
The east-west arbitrage, measured by the exchange of futures for swaps (EFS) differential, widened to a one-month high discount of around $75 a ton despite past few sessions of volatility as northwest Europe prices remained supported amid delivery hiccups along the Rhine river.
Refining margins GO10SGCKMc1 for the fuel were little changed day on day at slightly above $27 a barrel.
Spot premiums GO10-SIN-DIF for 10 ppm sulphur gasoil cargoes, however, fell by 8 cents from the previous session as lower-priced sellers were readily available in the prompt end-October loading market.
Spot liquidity in the jet fuel market also improved with at least two key refiners in northeast Asia starting their November discussions. Jet fuel refining margins JETSGCKMc1 rose in line with the gains in gasoil cracks.
International capacity numbers from China for October continued to rise to around 57% of pre-pandemic levels, OAG data showed. Exports of the aviation fuel are likely to increase to almost 1.9 million metric tons for October, estimates from Longzong and JLC showed.
SINGAPORE CASH DEALS O/AS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– Crude stocks gained by about 12.9 million barrels in the week ended Oct. 6, according to market sources citing American Petroleum Institute figures on Wednesday, on the condition of anonymity. Gasoline inventories rose by 3.6 million barrels, while distillate inventories fell by about 3.5 million barrels. [API/S}
– Singapore’s middle distillate stocks fell for the first time in three weeks, tracking robust net exports of jet fuel/kerosene though a dip in net exports of gasoil limited overall draws, official data showed on Thursday. O/SING1
NEWS
– Saudi Aramco is in talks to buy a 10% stake in Shandong Yulong Petrochemical Co, it said on Wednesday, a deal that would further boost the state oil giant’s investments in China.
– Russian wholesale diesel and gasoline prices declined further on Thursday after Moscow’s decision last week to mostly lift a fuel export ban, though some restrictions, including on gasoline cross-border sales, remain in place.
– Oil prices rose about 1% on Thursday, reversing earlier falls, on expectations that U.S. interest rates had peaked, but a lower demand growth forecast for next year from the International Energy Agency and higher U.S. inventories limited further gains.
Source: Reuters (Reporting by Trixie Yap; Editing by Shweta Agarwal)