Asia’s spot premiums for 10 ppm sulphur gasoil received support and rose for the third straight session on Wednesday, to 27 cents per barrel from a bout of open market buying for June parcels against a backdrop of zero offers.
Sellers were waiting for a clearer outlook on demand-supply fundamentals for July before they offer.
Separately, 10 ppm sulphur gasoil margins continued to trade sideways in the $14 and $15 per barrel range as thin liquidity in the swaps market continued for a third consecutive day.
Jet fuel refining margins were weighed on by weak demand outlooks, particularly from China. They slumped to below $13 a barrel at the market’s close.
Asian jet fuel demand declined by 0.2% on week, and while China’s number of flights remained stable from last week, there is some cause for concern, said StoneX analyst Harry Altham in a client note.
“In particular, there continues to be relatively sluggish appetite for international travel, with only 2,300 international flights per week currently scheduled, much of that short-haul.”
Regrade widened to a discount of $1.55 a barrel as a result.
SINGAPORE CASH DEALS
– No gasoil or jet fuel deal.
INVENTORIES
– U.S. crude oil and gasoline stockpiles were seen falling last week, while distillate inventories likely increased, a preliminary Reuters poll showed on Tuesday. Analysts estimated stockpiles of gasoline USOILG=ECI fell by about 200,000 barrels last week, while distillate, which include diesel and heating oil, increased by about 1.1 million barrels.
– Middle distillate stockpiles at Fujairah Oil Industry Zone were down about 16.9% at 3.928 million barrels for the week ended May 29, according to industry information service S&P Global Commodity Insights.
NEWS
– China’s factory activity shrank faster than expected in May on weakening demand, heaping pressure on policymakers to shore up a patchy economic recovery and knocking Asian financial markets lower.
– Top oil exporter Saudi Arabia may further slash the official selling prices (OSPs) for all crude grades to Asia by $1 a barrel in July, a Reuters poll showed, despite the looming OPEC+ meeting that could leave the door open to further output reduction.
– Russia’s offline primary oil refining capacity is expected to fall by 38% in June from May to 3.05 million tonnes, industry sources said and Reuters calculations showed on Tuesday.
– Russia’s exports of ultra-low sulphur diesel (ULSD) from the Baltic Sea port of Primorsk were revised up by 10% in May, or by 120,000 tonnes against the previous plan, to 1.3 million tonnes, traders said and Refinitiv data showed on Wednesday.
Source: Reuters