Asia’s middle distillates markets remained barren of physical cargo deals on the trading window for the fourth straight session, while refiners sold April spot cargoes in discounted territory.
Some prompt jet fuel was sold by one major Chinese refiner for end-March shipment at discounts of more than $1 per barrel, with traders expecting more offers to emerge from refiners there in the coming week.
Jet fuel was particularly supported by a wide east-west arbitrage to the U.S. west coast, given lower refinery utilisation rates there.
Buying interest for both March and April cargoes from importers there was evident since early in the week, one trade source with direct knowledge of the matter said.
The arbitrage is also open for Middle East and India-origin jet fuel to the U.S. west coast, said Sparta Commodities’ analyst James Noel-Beswick.
Meanwhile, for diesel, the east-west price spread hit its highest levels at discounts of $x per metric ton since the first week of March as ARA markets were supported by a drawdown in commercial stockpiles and lower imports expected in April.
Spot refiner sales, however, were mostly done at discounts of nearly $1 a barrel throughout the week, reflecting overall cautious buying interest compared with two weeks earlier.
Refining margins (GO10SGCKMc1) closed the week at $13.5 a barrel, little changed from last Friday and around 15 cents lower than the previous trading session.
On the trading window, a buy-sell gap continued to hinder deals and discussions. Bids were scant for the fourth straight session.
The 10ppm cash differentials (GO10-SIN-DIF) slipped to more than a one-month low of 16 cents per barrel, reflecting the consistently lower-priced offers.
Regrade (JETREG10SGMc1) closed the trading session at 91 cents a barrel, narrowing from a week earlier by slightly more than 10 cents.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by over 4% on the week to their lowest since mid-December, data from Dutch consultancy Insights Global showed.
REFINERY NEWS
– Phillips 66’s 356,500 barrel-per-day Wood River refinery is undergoing a turnaround, research company IIR Energy said on Thursday.
NEWS
– OPEC+ on Thursday issued a new schedule for seven member nations to make further oil output cuts to compensate for pumping above agreed levels, which will more than overtake the monthly production hikes the group plans to introduce next month.
– The U.S. on Thursday issued new Iran-related sanctions, targeting entities including for the first time a Chinese “teapot,” or independent refinery, and vessels that supplied crude oil to such processing plants.
– Oil prices rose on Friday, and were set for a second consecutive weekly gain, as fresh U.S. sanctions on Iran and a new plan from the Organization of Petroleum Exporting Countries and its allies (OPEC+) to cut output raised bets on tighter supply.
Source: Reuters