Asia’s middle distillates markets recorded upbeat activity as bullish sentiment remained prevalent against a backdrop of tight front-month supply-demand balances.
Supplies remained curbed by refinery maintenance in several regions, with several shutdowns expected to start from mid-May, even as some refiners return to regular production this week.
Meanwhile, June spot sales are likely to start in the next few days as refiners continue to sell off their regular volumes.
On the buying front, some last-minute procurement activity was still ongoing, especially for higher-sulphur grade cargoes, as some importers stock up in fear of limited spot availability.
Refining margins kickstarted the week higher at around $16.2 a barrel, its highest level since end-February.
On the trading window, sellers were scant at the start of the week with mostly bids.
Cash differentials closed the trading session little changed at premiums of 90 cents per barrel, reflecting the steeper backwardation in paper markets despite a lower-priced deal on window.
Regrade closed the trading session at slightly more than $1 a barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal
NEWS
– OPEC+ will accelerate oil output hikes and could bring back to the market as much as 2.2 million barrels per day by November, five OPEC+ sources said, as the group’s leader Saudi Arabia seeks to punish some fellow members for producing above quotas.
– Shell Plc is working with advisers to evaluate a potential acquisition of rival BP Plc, though it is waiting for further stock and oil price declines before deciding whether to pursue a bid, Bloomberg News reported on Saturday, citing people familiar with the matter.
– Oil prices fell more than 2% on Monday after OPEC+ decided over the weekend to further speed up oil output hikes, spurring concerns about more supply coming into a market clouded by an uncertain demand outlook.
– Russia’s exports of ultra-low-sulphur diesel from the Baltic Sea port of Primorsk in April fell by 22% to 1.333 million metric tons, from 1.763 million tons loaded in March, data from LSEG and market sources showed on Monday.
Source: Reuters