Asia’s middle distillates markets trudged on to a second day of quiet activity, against a backdrop of softer ICE gasoil futures and shaky crude price movements overnight.
Traders were checking out to see how September spot demand-supply fundamentals will pan out given that the forward market structure is still bullish between October and November prices, both on a futures and paper market basis.
For now, the arbitrage price difference is allowing swing suppliers in India and the Middle East to likely consider west of Suez markets, which could be supportive, one trade source said.
Refining margins fell to an almost one-week low of around $16.70 a barrel, erasing gains in the past few trading sessions, weighed on by softer futures and paper discussion levels.
Cash differentials slipped further into deeper discounts, as a reflection of the wider contango structure in the paper markets, but a lack of buying interest limited physical cargo discussions.
In jet fuel markets, physical cargo discussions were equally thin, with trader expectations on China export volumes at around 1.7 million metric tons for August now.
Regrade was little changed at a discount of around 95 cents a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– U.S. crude oil and product stockpiles were expected to have fallen last week, a preliminary Reuters poll showed on Monday. EIA/S
REFINERY NEWS
– Motiva Enterprises plans to restart the shut gasoline-producing fluidic catalytic cracker (FCC) at its 626,000-barrel-per-day (bpd) Port Arthur, Texas, refinery on Tuesday, said two people familiar with plant operations on Monday.
– Operations at Indonesian Pertamina’s Balikpapan refinery CDU IV have returned to normal after it was affected by a fire in late May, a spokesperson at its refinery subholding told Reuters on Tuesday.
– Japan’s largest refiner, Eneos Corp, restarted the 129,000 barrel-per-day crude distillation unit at its Chiba refinery near Tokyo on July 28 after fixing a system problem, a company spokesperson said on Tuesday.
– Oil prices fell on Tuesday, extending losses from the previous session amid concerns about demand in China, the world’s largest crude importer, while the market shrugged off the risk of conflict escalating in the Middle East.
– New Zealand said on Tuesday it would conduct a study to review the country’s fuel security requirements amid concerns any potential disruptions to the international supply chain could affect domestic supplies.
– Australia’s Ampol ALD.AX said on Tuesday it will work with local agribusiness Graincorp GNC.AX and asset manager IFM Investors to study a potential renewable fuel production facility at its Lytton refinery in Brisbane.
– Oil trader Coral Energy has rebranded as 2Rivers Group after a management buyout this year, the new company’s executive director said on Monday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shailesh Kuber)