Asia’s middle distillates markets were volatile through the week though it turned quiet on Friday, with traders focusing on March refiner spot sale discussion levels amid a wider east-west price spread and stronger refining margins week on week.
Traders were monitoring the wider east-west arbitrage price spreads – around $30 per ton in the afternoon trading session for March – to see if higher Europe prices will egg swing suppliers to send more cargoes there starting March. (0#GO10SGEFS:)
However, inventories are still high in Europe so it remains unclear how much demand can soak up these supplies next month, one Singapore-based trade source cautioned.
Cheaper freight costs via the Suez canal route could also push sellers to look west for demand outlets, which could help cut the supply length in Asia, a second source said.
On Friday, the 10ppm sulphur gasoil refining margins (GO10SGCKMc1) gave back some of previous session gains, though they were overall still higher by nearly $1 from last week.
Meanwhile, in cash markets, spot differentials (GO10-SIN-DIF) climbed for the fourth straight session to almost 30 cents per barrel, reversing most of the losses over the past two weeks given the robust March buying interest.
Offers also turned scant for March cargoes on the trading window though, further supporting the gains.
Jet fuel markets were supported by an opened arbitrage window between Asia and the U.S. west coast, with traders saying some production hiccups there are causing tighter supplies.
Enquiries in the shipping markets for jet fuel flowing on this route were gaining momentum since mid this week, one shipbroking source said, though fixtures have yet to be firmed up.
Jet fuel spot market premiums (JET-SIN-DIF) also gained for a fourth straight session, though trades were thin and levels were still weaker week on week.
Ample spot supplies from China which are likely to be on offer soon, according to some trade sources, capped overall market firmness for the aviation fuel.
Regrade (JETREG10SGMc1) discounts were wider week on week at 90 cents per barrel, though the spreads narrowed from the previous trading session.
SINGAPORE CASH DEALS
– No deals for both fuel
INVENTORIES
– Gasoil stocks were little changed at 2.57 million tons as inland demand and imports from the Middle East remained steady, Wageningen said.
REFINERY NEWS
– Independent U.S. refiner PBF Energy PBF said it has no estimate for how long its 156,400-barrel-per-day (bpd) Martinez, California, refinery will remain shut following a fire on February 1, according to a statement released on Thursday.
NEWS
– Oil prices rose on Friday, poised to end three weeks of decline, buoyed by rising fuel demand and expectations that U.S. plans for global reciprocal tariffs would not come into effect until April, giving more time to avoid a trade war.
– Russia’s oil exports could be sustained if it finds workarounds to the latest U.S. sanctions package, the International Energy Agency (IEA) said on Thursday, as it forecast that growth in global oil supply would outpace demand this year.
– Tightened U.S. sanctions on Moscow have disrupted a roaring trade in discounted Russian oil to China and India, reviving demand for Middle Eastern and African crudes, roiling shipping markets and driving up oil prices.
Source: Reuters