Asia’s middle distillates’ June spot activity remained in full swing for refiners, as a handful continued their regular offers in line with earlier expectations, though jet fuel markets continued to come under pressure.
Some discussion levels however were slightly higher from a month ago, given some trader shortcovering activities, several trade sources said.
Jet fuel offers also surfaced from China again, with some traders expecting June volumes to possibly be similar to May volumes as of now.
Traders were also eyeing June export volumes from China to see if there would be any supply-demand balances regionally.
Refining margins jumped nearly $1 to close at $17.1 a barrel, its highest since mid-February.
On the trading window, discussions were scant and liquidity dipped given the macro uncertainties.
Cash differentials declined and mostly tracked the weakness in paper market structure, amid a persistent buy-sell gap.
Front-month jet fuel markets remained under pressure, with paper structure switching into contango before the rollover in assessment months. Jet fuel differentials fell to discounts of around 1 cent per barrel, reflecting the weakness.
June regrade, however, closed the trading session slightly narrower at discounts of 65 cents per barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Singapore’s middle distillates inventories surged further to nearly 10 million barrels and net exports of both diesel and jet fuel continued to decline, official data showed on Thursday.
– Total U.S. distillate fuel oil stocks, which include diesel and heating oil, fell by about 3.2 million barrels last week to 103.6 million barrels, the lowest since April 2005, data from the U.S. Energy Information Administration showed on Wednesday.
NEWS
– OPEC on Wednesday trimmed its forecast for growth in oil supply from the United States and other producers outside the wider OPEC+ group this year and said it expected lower capital spending following a decline in oil prices.
– Japanese oil companies are scaling back decarbonisation initiatives, including hydrogen and ammonia projects, amid a global shift towards more stable and cost-effective fossil fuels.
Source: Reuters