Asia’s middle distillates markets remained thinly discussed, with traders awaiting January spot activity to be in full bloom the next few trading sessions.
Traders held mixed views on the diesel/gasoil demand-supply balance in the next two months, with most expecting it to hinge on the weather situation in the west – though the east-west arbitrage price spread was at its narrowest in slightly more than three months.
On the jet fuel/kerosene front, traders were slightly more positive given production issues at Japan-based refineries ahead of some scheduled maintenance – though spot buying remains slightly subdued.
Spot January cargoes for jet fuel were still being discussed at premiums, as expectations of heating and travelling demand stayed bullish.
Term cargoes for 2025 loading, from northeast Asian refiners, were being negotiated at premiums of around $1 a barrel as well, one trader said.
Volumes to the U.S. market are likely to come under the market scrutiny as well, given that demand should pick up from that region, a second trader said.
Refining margins GO10SGCKMc1 for 10ppm sulphur gasoil slipped for a third straight session this week, closing at nearly $14 a barrel, reflecting the weakness.
Cash differentials GO10-SIN-DIF were little changed despite a higher-priced deal, given the wide buy-sell gap in the open trading window.
Regrade JETREG10SGMc1 was flat and remained at premiums of slightly around 30 cents a barrel.
SINGAPORE CASH DEALS O/AS
– One gasoil deal, no jet fuel deal
INVENTORIES
– U.S. crude stocks fell by more than expected last week as refiners ramped up operations, offsetting a rise in crude imports, the Energy Information Administration (EIA) said on Wednesday.
– Singapore’s middle distillates stockpiles eased for the first time in six weeks even though the country turned net importer of jet fuel for the second time in two months, as net exports of diesel/gasoil rose, official data showed on Thursday.
REFINERY NEWS REF/OUT
– Shell SHEL.L completed a two-month long maintenance shutdown at its 400,000 barrel per day Pernis oil refinery in Rotterdam in the Netherlands on Wednesday and is currently restarting units at the plant, the company said on X.
NEWS
– A single bank sold a large volume of U.S. oil futures contracts in early afternoon trading on Wednesday, a person with direct knowledge of the matter said, pushing prices down more than 1% within minutes and causing traders to scramble to decipher the reason.
– OPEC+ is likely to extend its latest round of oil production cuts by at least three months from January when it meets online at 1100 GMT on Thursday, OPEC+ sources told Reuters, to provide additional support for the oil market.
– Igor Sechin, the head of Russia’s largest oil producer Rosneft ROSN.MM, said on Thursday that the OPEC+ group’s decisions to reduce oil output in 2016 and 2020 helped the U.S. shale industry and made it a leading global energy exporter.
– Russia’s seaborne diesel and gasoil exports rose in November on increased fuel production following a reduction in seasonal and unplanned refinery maintenance, LSEG and market sources data show.
Source: Reuters (Reporting by Trixie Yap; Editing by Janane Venkatraman)