Spot premiums for 10 ppm sulphur gasoil rose for the sixth consecutive week, despite falling 9 cents day on day, on strong prompt shortcovering demand, while China’s June exports of jet fuel to the United States may hit a record.
Buyers were still on the lookout for prompt July parcels in the open market as evidenced from the bids, either seeking to deliver to the Pacific or to the West, although bid levels were steady compared with earlier this week.
However, the pace at which cash premiums rose slowed down on the last trading day of the week as the number of sellers increased with at least two major trading houses in the market offloading cargoes since Monday.
Meantime, refining margins for the industrial and transport fuel lost steam and fell to $17.50 a barrel for the first time in four weeks, against a backdrop of volatile crude futures.
Jet fuel refining margins fell as well to $16.02 a barrel, but the declines were capped by expectations of cargoes heading West because of the export arbitrage window between Asia and the U.S. West Coast.
China’s jet fuel exports to the United States may hit more than a 3.5-year high as traders cashed in on the margins for sales there.
At least two cargoes of around 40,000 metric tons each will be loading out of China within the next week, bound for the U.S. West Coast, Kpler shiptracking data and shipping fixtures showed.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– U.S. crude stocks posted a surprise draw in the last week, helped by strong export demand and low imports, while gasoline and distillate inventories rose, the Energy Information Administration said on Thursday. EIA/S
– Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped by 9.5% in the week to Thursday, data from Dutch consultancy Insights Global showed. ARA/
NEWS
– Indian state-run refiner BPCL is in talks with Rosneft to buy about 6 million metric tons (43.8 million barrels) of discounted Russian crude at a price based on the Dubai benchmark, according to three sources with direct knowledge of the matter.
– Record heat across Asia is putting its surging renewable power fleet to the test, highlighting the need for backup supply, transmission system upgrades and tariff reforms to ensure reliability and stave off a slowdown in green energy adoption.
– Oil prices fell for a second straight session and were headed for a weekly decline of more than 3% on Friday, as a higher-than-expected interest rate hike in Britain and warnings about looming rate rises in the U.S. ignited concerns over demand.
Source: Reuters (Reporting by Trixie Yap; Editing by Sohini Goswami)