Asia’s middle distillates markets staged a rebound week on week, as traders sought to clear their paper positions before the year-end amid some pockets of firm demand expectations for next month, while January sales activity turned upbeat.
Refiner sale negotiations for January cargoes were underway since late week, though markets were unclear if volumes offered will be similar from a month ago. Both GS Caltex and SK Energy offered first-half January cargoes.
Meantime, jet fuel markets were seeing mixed messages as some buyers said they have covered their December requirements and were only looking at January for now but spot premiums remained high.
Supplies of the aviation fuel were readily available from China, with at least two 60,000-metric ton cargoes under discussion for export from Zhoushan and Dalian loading in the next two weeks.
Markets were still looking towards China for a clearer direction on next year’s overall fuel export volumes, though thin volumes for December and January have currently been factored in by the traders.
Looking ahead, analysts stayed bullish on their diesel outlooks for 2025, given a curtailment in supplies in the west from refinery closures and slightly improving demand fundamentals.
Refining margins GO10SGCKMc1 climbed for the first week in four back to around $16 a barrel, recouping some losses earlier, though some traders expect that the uptrend could remain arduous in the near-term.
Paper markets received a boost since early week as traders rushed to clear their positions for the year for the month’s remainder, supporting prices further.
Cash differentials GO10-SIN-DIF closed the trading session at a premium of 53 cents a barrel, clawing back past two weeks’ of losses. Offers remained scant for a second straight trading session for January spot cargoes on the trading window.
Regrade JETREG10SGMc1 narrowed to a discount of 17 cents a barrel, reversing earlier sessions’ of weakness, but levels were still weaker than a week ago.
SINGAPORE CASH DEALS
– No deals
INVENTORIES
– Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub, which include diesel and heating, fell by 0.3% on the week to 2.12 million tons as demand waned in the region.
NEWS
– Oil prices nudged upwards on Friday, heading for their first weekly rise since the end of November, as additional sanctions on Iran and Russia ratcheted up supply worries, while a surplus outlook weighed on markets.
– Three of Canada’s biggest oil producers, Suncor Energy SU.TO, Cenovus Energy CVE.TO and Imperial Oil IMO.TO, on Thursday projected higher production in 2025, betting on resilient demand for Canadian crude in U.S. and international markets.
– Deliveries of low-sulphur gasoil LGOc1 for December fellto 225 lots or 22,500 tonnesat expiry, down from 854 lots in November, InterContinental Exchange (ICE) data showed on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Mohammed Safi Shamsi)