Asia’s gasoil market snapped almost two-and-a-half weeks of thin liquidity, with three deals settled in the open market and a Chinese state-owned refiner being the key seller.
PetroChina sold all three end-June loading cargoes at a 60 cents-per-barrel premium to Singapore quotes to three separate buyers, with one saying that they could be looking at more planned export requirements for the month given strong demand outside China the past two weeks.
Planned export volumes from the refiner is estimated at up to 15,000 tonnes for June loading now, according to three sources.
The 10 ppm sulphur gasoil spot market premiums (GO10-SIN-DIF) recorded gains of more than 100% on week, in the fourth consecutive week of increments, mainly due to the steady demand for spot prompt June lots and a persistent lack of sellers.
However, expectations that supply could lengthen in July-August as major refinery units return from planned overhauls slowed down gains, as evidenced from the backwardated swaps market structure.
Refining margins (GO10SGCKMc1) for the transport fuel likewise climbed for a second consecutive week, by 9.7% to $16.38 a barrel.
On the jet fuel front, refining margins (JETSGCKMc1) were supported for the second week – up by around 10% on week – as talks of an opened arbitrage to the U.S. West Coast continued. This comes in line with low stockpiles in that region for jet fuel/kerosene, official EIA data showed two days earlier. (JET-STK-5-EIA)
Regrade (JETREG10SGMc1), however, closed the session slightly wider on week at a discount of 93 cents a barrel
TENDERS
– South Korea’s GS Caltex starts offering first-half July gasoil
– Kuwait’s KPC offers second gasoil cargo for June in a week
SINGAPORE CASH DEALS
– Three gasoil deals, no jet fuel deal.
INVENTORIES
– Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage rose by about 3% in the week to Thursday, data from Dutch consultancy Insights Global showed.
NEWS
– Oil prices looked set to post their second straight weekly loss, as prices continued to fall on Friday over concerns about demand from China and due to scepticism over the United States and Iran striking a nuclear deal.
– Concern about the global economy dampened the oil market’s reaction to Saudi Arabia’s pledge to cut supplies and has capped prices this year, a Chevron CVX executive told Reuters on Thursday.
– Britain’s windfall tax on oil and gas producers will not be applied if prices drop below certain levels for six months in a row, the finance ministry said on Friday, in a move the government hopes will boost energy security.
Source: Reuters