Asia’s middle distillates markets mostly firmed on the margins and differentials front amid rising ICE gasoil futures and steady discussions for January spot parcels.
Spot trading activity continued to be upbeat as some South Korean refiners continued their January discussions in line with expectations.
At least two more major northeast Asian refiners also settled their term supplies at premiums of 50 cents to 80 cents on a free-on-board (FOB) basis.
Some expectations of more India-origin cargoes heading to Singapore emerged, given the volatile east-west arbitrage spreads the past few weeks, which could weigh on supply outlooks going into January next year.
Up to 200,000 metric tons of diesel is bound for Singapore from India for December-loading, shiptracking data from Kpler and LSEG showed, higher than the 25,000 metric tons in November.
Meanwhile, India-origin exports to Europe could slip to around 400,000 metric tons in December, down by around or more than half from November, the data showed.
Cash differentials for the transport and industrial fuel climbed further to 21 cents a barrel as one China oil major continued to bid for early January spot lots. A lack of offers limited deals for a fourth straight session this week.
Refining margins for 10 ppm sulphur gasoil closed the trading session at a new high for the week, slightly above $23 a barrel.
Jet fuel refining margins firmed as well to slightly above $24 a barrel, with regrade widening further to a premium of $1.30 a barrel despite a lack of strong demand cues in the spot market.
Some traders attributed the higher premiums to some position clearing, given the firmness in gasoil futures in the late afternoon trading session.
SINGAPORE CASH DEALS
– No deals for both fuels.
INVENTORIES
– Distillate stockpiles in the U.S., which include diesel and heating oil, rose by 1.5 million barrels in the week to 113.5 million barrels, versus expectations for 600,000 barrel rise, the EIA data showed.
– Singapore’s middle distillates stockpiles slipped for the fourth consecutive week on a surge in net exports of both gasoil/diesel and jet fuel/kerosene, official data showed on Thursday.
REFINERY NEWS REF/OUT
– Japan’s Cosmo Oil, a unit of Cosmo Energy Holdings, has restarted the 75,000 barrel-per-day (bpd) No.1 crude distillation unit (CDU) at the Chiba refinery, near Tokyo, after planned maintenance, a company spokesperson said on Thursday.
– Firefighters on Wednesday were battling a fire at Marathon Petroleum’s 593,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, a company spokesperson said. Production would not be affected by the fire, the sources said.
NEWS
– Oil investors will usher in 2024 with gnawing concerns about oversupply, slowing economic growth and simmering Middle East tension that could spark price volatility.
– Singapore’s Maritime and Port Authority (MPA) said on Thursday it was seeking proposals from companies to supply methanol as a marine bunker fuel at Singapore from 2025.
– Russia’s offline primary oil refining capacity for December has almost tripled from previous plans to 2.098 million metric tons as some refineries reviewed their maintenance plans, Reuters calculations showed on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Eileen Soreng)