Asia’s middle distillates margins overall recorded weakness on worries of a supply deluge from some regional refiners for January shipments against a backdrop of limited crude futures changes.
At least three China refiners sought to sell or already sold both gasoil and jet fuel for January loading, with expectations of export quotas to be issued in the next few days.
The arbitrage window for exports to the West was little changed week on week and still closed at around $40 per metric ton, weighing on the overall market.
Refining margins for the transport and industrial fuel slipped to slightly above $20 a barrel.
Spot cash premiums for January shipments, however, closed the trading session slightly higher as some buyers for prompt parcels emerged, against a backdrop of few offers.
Jet fuel refining margins remained slightly weighed on by the emergence of more spot lots from China and overall slower demand, with some regional buyers by the sidelines after covering their requirements earlier.
At least one more China major refiner offered a spot lot for early January shipment.
Some trade sources were surprised that the market continued to be traded at premiums despite the sudden influx of spot cargoes for January.
Regrade continued trading at discounts of around 30 cents a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Analysts in a Reuters poll estimated stockpiles of gasoline were up by about 400,000 barrels last week, and distillate stockpiles, which include diesel and heating oil, were seen increasing by about 1 million barrels.
– Middle distillates stockpiles at Fujairah Oil Industry were little changed at 2.506 million barrels for the week ended Dec. 25, according to industry information service S&P Global Commodity Insights.
NEWS
– Half of Russia’s oil and petroleum exports in 2023 will have gone to China while India’s share has risen in two years to 40%, Russia’s state news agencies cited Deputy Prime Minister Alexander Novak as saying in remarks published on Wednesday.
– China’s November industrial profits posted double-digit gains as overall manufacturing improved, although soft demand continued to constrain business growth expectations, emboldening calls for more macro policy support.
– The United States has finalized contracts to purchase three million barrels of oil to help replenish the Strategic Petroleum Reserve (SPR) after the largest sale in history last year, the U.S. Department of Energy said on Tuesday.
– Brazilian state-run oil company Petrobras PETR4.SA will reduce diesel prices at its refineries by an average of 8% starting Wednesday, it said in a statement on Tuesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shailesh Kuber)