Asia’s middle distillates markets continued to see a slew of trading activity on a window and spot sales basis on Wednesday, against a backdrop of firm supply-demand fundamentals.
Sales continued from South Korea’s oil majors for November spot cargoes, given strong sale prices, with GS Caltex offering three more lots via a tender that closes tomorrow.
Traders are still factoring in more potential demand from a few southeast Asian importers, while China-origin barrels stay limited for November now.
Paper markets, however, were less liquid in comparison.
Refining margins gained almost $1 a barrel to almost $14 a barrel.
Cash differentials gained further to 58 cents a barrel as some buyers continued to seek November cargoes, in line with strong demand expectations in November.
In the jet fuel market, bullish expectations remained given that there has been consistent stocking up activity from regional air hubs such as Hong Kong and Singapore, one trade source said, though it remains to be seen if buyers can continue to pay up at premiums levels.
Some traders are expecting record-high jet fuel arrivals from the Middle East and India for October in Asia for now.
For the October to-date period, Middle East and west coast India volumes to Asian destinations could hit a two-year high of 173,000 metric tons, LSEG shiptracking data showed.
Regrade closed the trading session at a premium of 45 cents a barrel, up by 5 cents from the previous session.
SINGAPORE CASH DEALS
– One gasoil deal, one jet fuel deal.
INVENTORIES
– U.S. crude oil stocks rose last week while gasoline and distillates fell, market sources said, citing American Petroleum Institute figures on Tuesday.
– Middle distillates stocks at Fujairah Oil Industry Zone slipped by more than 700,000 barrels to 2.238 million barrels for the week ended Oct. 21, according to industry information service S&P Global Commodity Insights.
NEWS
– Freight rates for tankers exporting oil from Russian ports to Asia have risen this month ahead of winter and are set to climb further after recent Western sanctions hitting more tankers involved in the trade, according to industry data and sources.
– Companies drilling for the crude that turned the U.S. into the world’s top oil producer face an unexpected dilemma: their West Texas Midland crude is getting lighter, which could make it less appealing to some refiners.
– U.S. oil refiners’ third quarter profits are expected to fall from last year on weakening margins as fuel demand softened and new refining capacity came online, energy analysts said.
– India’s annual diesel consumption is expected to rise by 3%-4% in the current fiscal year to March 31, said V. Satish Kumar, chairman of Indian Oil Corp (IOC).
Source: Reuters (Reporting by Trixie Yap; Editing by Sonia Cheema)