Asia’s middle distillates cash markets extended losses as expectations of ample, prompt supplies emerged, while March refiner sales activity continued to gain momentum.
A handful of traders were concerned about the excess supplies in the near-term due to increasing import arrivals in the coming week.
Quite a number of northeast Asia-origin cargoes will be bound for Singapore in the coming weeks, given a lack of demand there, one trade source said.
Meantime, Asian prices need to be lower so that the wider east-west arbitrage can allow some swing suppliers to pivot west instead, a second source said.
More March selling activity emerged, in line with expectations, as Taiwan’s CPC Corp kicked off their sales tender for 10ppm sulphur gasoil.
Refining margins (GO10SGCKMc1) closed the trading session at similar levels from the previous day, around $16.1 a barrel.
The 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) came under further pressure and closed at around 20 cents a barrel, as a reflection of the bearish trading sentiment and persistent offers – with no buyers in the open trading window.
Regrade (JETREG10SGMc1) was slightly wider at a discount of 90 cents per barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– U.S. crude oil and gasoline stocks rose last week while distillate inventories fell, market sources said, citing American Petroleum Institute figures on Tuesday.
– Middle distillates stocks at Fujairah Oil Industry Zone were at 1.841 million barrels, the lowest since November last year, in the week ended Feb. 3, according to industry information service S&P Global Commodity Insights.
NEWS
– China’s services activity expanded at a slower pace in January, with the Lunar New Year holidays worsening employment, but business sentiment improved, a private sector survey showed on Wednesday.
– U.S. President Donald Trump on Tuesday restored his “maximum pressure” campaign on Iran that includes efforts to drive its oil exports down to zero in order to stop Tehran from obtaining a nuclear weapon.
– Fuel oil margins climbed after Trump reimposed the stricter policy on Iran, though trade sources expect a short-lived rally due to unclear supply disruptions, while soft China demand and broader tariff fears weighed on sentiment.
Source: Reuters