Asia’s 10 ppm sulphur gasoil margins and jet fuel cracks fell again, hitting a new low since more than a year ago, on the back of a narrower east-west arbitrage spread and overall thin buying interest regionally.
The prompt month EFS spread, a differential between Asian gasoil paper swaps and ICE gasoil futures, fell to the lowest in the week at a discount of less than $38 a tonne.
Supplies remained sufficient, with May volumes likely to remain steady from north and southeast Asian refiners and discussions are likely to start next week, a few traders said.
Decreases were capped by expectations of preliminary lower export volume estimates from China for April – around 500,000 tonnes, from data compiled by consultancies Refinitiv Oil Research and Longzhong.
Cash differentials (GO10-SIN-DIF) were supported by prompt mid-April shortcovering demand in the open trading market, although some participants were sceptical if this represented organic demand.
Regrade recouped some earlier losses and closed the trading session at a discount of around $3.85 per barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– U.S. crude oil stockpiles fell unexpectedly last week as refineries restarted operations after maintenance and imports fell to a two-year low, the Energy Information Administration said on Wednesday. Distillate stockpiles (USOILD=ECI), which include diesel and heating oil, rose by 300,000 barrels in the week to 116.7 million barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed.
– Inventories of middle distillates at key trading hub Singapore climbed further by 2.3% week on week despite an increase in total net export volumes, official data showed on Thursday.
NEWS
– Privately controlled Zhejiang Petrochemical Corp (ZPC), operator of China’s largest refinery, said on Thursday it has reached a strategic agreement with state refining giant Sinopec 600028 on the domestic marketing of its fuel. Under a deal reached earlier this week, Sinopec will handle more than 60% of ZPC’s domestic refined products sales, worth about 55 billion yuan ($8.0 billion) a year, the company said in a statement posted on its WeChat account.
– PetroChina’s 601857, 601857 net profit jumped 62.1% to a record high last year as stronger energy prices more than offset weak demand for fuel and chemicals, China’s largest oil and gas producer said on Wednesday.
– Shell has decided not to go ahead with two projects it was studying to produce biofuels and base oils in Singapore, a company spokesperson said on Thursday.
Source: Reuters