Asia’s 10 ppm sulphur gasoil market started recording trading activities on Tuesdayafter August spot sellers such as SK Energy emerged against the backdrop of cautious August demand-supply expectations and softer ICE gasoil futures.
The caution remained as new estimates showed July China-loading exports will hit 1 million metric tons or more, one Singapore-based trader said. This is around 200,000 metric tons higher than expectations from two weeks earlier.
State-owned major China Petroleum & Chemical Corp., also known as Sinopec, will likely export close to 600,000 metric tonsof the 1 million metric tonsfor July loading, two traders said separately.
Refining margins for industrial fuel climbed for the second consecutive session this week to almost $18.7 a barrel.
Spot premiums for 10 ppm sulphur gasoil rose further to $1.14 a barrel as buying interest stayed aggressive for prompt end-July parcels from two major trading houses.
On the jet fuel front, arbitrage trades from Asia to the U.S. turned minimal after the price spread between both regions narrowed to $9-$10 a barrel, compared with more than $15 a barrel last week, although seller margins could still be positive given the economical freight costs now of around $5 a barrel.
Seller margins to northwest Europe remained healthy – above $7 a barrel after taking freight costs into consideration – as jet fuel prices there have climbed by almost 10% since the start of July, Refinitiv Eikon data showed.
Refining margins for the aviation fuel firmed to around $17.50 a barrel, with regrade narrowing to around a discount of $1.20 a barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– Analysts polled by Reuters estimated stockpiles of gasoline were down by about 1.3 million barrels last week, while distillate stockpiles, which include diesel and heating oil, decreased by about 400,000 barrels.
NEWS
– Indonesia’s coast guard (Bakamla) said on Tuesday it seized an Iranian-flagged tanker suspected of involvement in the illegal transshipment of crude oil.
– Singapore’s Maritime and Port Authority has issued an expression of interest calling for proposals to design and promote the use of fully electric harbour craft in Singapore, it said in a statement on Tuesday.
– Oil prices edged higher on Tuesday supported by supply cuts by the world’s biggest oil exporters and continued hopes for higher demand in the developing world in the second half of 2023.
Source: Reuters (Reporting by Trixie Yap; Editing by Sohini Goswami)