Asia’s diesel spot trading liquidity on window turned thin on Friday, as the market’s backwardation structure eased, though October spot sales ticked up from northeast Asian refiners and discussions were at higher levels from last month.
October spot sales were done or being discussed in the premium levels, with at least two northeast Asian refiners offering via tenders or private negotiations.
Markets received a boost since mid-week due to expected and unexpected shutdowns in the west, with the refinery maintenance season also gradually starting in this region.
September and October diesel east-west price spreads were robust, holding firm at discounts of $45 to $49 per metric ton since mid-week, propped up by the strength in ICE gasoil futures.
Swing suppliers are likely to still pivot their cargoes west in the near-term, as fears of declining supply in the west were real ahead of possible stockpiling requirements before winter.
Meanwhile, spot activity on the trading window was more upbeat than a week earlier, as seen in various deals done and the volatile paper market structure.
Refining margins (GO10SGCKMc1) held firm at slightly more than one-month highs of around $19.7 a barrel.
Cash differentials (GO10-SIN-DIF) firmed for the first time in six weeks, closing at 87 per barrel for the trading session, though activity was minimal.
For jet fuel, the east-west price spreads were also supportive for swing suppliers to continue sending their spot cargoes westward.
Regrade (JETREG10SGMc1) widened further to discounts of nearly $1.9 a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Gasoline stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose sharply by 16%, data from Dutch consultancy Insights Global showed on Thursday.
REFINERY NEWS
– Irving Oil’s 320,000-barrel-per-day refinery in Saint John, New Brunswick, will begin a 30-day turnaround later this month, the company said in a press release on Thursday.
– The gasoline unit at Nigeria’s 650,000 barrel-per-day Dangote refinery may be shut for 2-3 months for repairs, industry monitor IIR Energy told clients on Thursday, which could lead to a tighter gasoline market.
NEWS
– In the event of a peace deal between Russia and Ukraine, the European Union should not return to Russian energy, EU Energy Commissioner Dan Jorgensen said on Friday as he arrived for a informal meeting with EU energy ministers in Copenhagen.
– Top Indian refiner Indian Oil Corp IOC skipped the purchase of U.S. oil in its latest tender and instead bought 2 million barrels of West African and a million barrels of Middle Eastern grade, trade sources said on Friday.
– Oil extended its decline into a third session on Friday, heading for a weekly loss for the first time in three weeks as expectations grow of higher supply and a surprise increase in U.S. crude inventories added to demand concerns.
Source: Reuters