Asia’s middle distillates cracking margins recovered around 15% week on week, despite volatility in the past few sessions, tracking a rebound in ICE gasoil futures amid an improvement in trading activity for November-loading cargoes.

Talks of Sinopec Corp seeking to transfer export quotas for marine fuel to clean products such as diesel, jet fuel and gasoline also emerged, contributing to volatility.

Refining margins for 10ppm sulphur gasoil and jet fuel were $28.20 a barrel and $25.35 a barrel, respectively.

Several November offers emerged from South Korean refiners for both diesel and jet fuel, with discussion levels mostly at premiums to Singapore quotes.

The east-west arbitrage, typically measured by the exchange for futures of swaps (EFS), for October widened to a one-month high towards the end of the week, but subsequently narrowed for November given the steep backwardation in northwest Europe prices amid Rhine river delivery woes.

Spot market premiums GO10-SIN-DIF, however, were little changed week on week, reflecting the continuously narrow backwardation in the prompt-forward price structure as most traders have cleared their October positions.

Strong spot selling interest from at least two major trading houses also minimised fluctuations in spot premiums.

Regrade was mostly steady through the week at slightly above $2 a barrel as discussions were still thinner compared with 10ppm sulphur gasoil

SINGAPORE CASH DEALS

– No deals for both fuels.

INVENTORIES

– Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by 4.6% in the week to Thursday, data from Dutch consultancy Insights Global showed.

– U.S. distillate stockpiles, which include diesel and heating oil, fell by 1.8 million barrels in the week to 117 million barrels, versus expectations for an 800,000-barrel drop, the EIA data showed.

REFINERY NEWS

– Marathon Petroleum MPC.N restarted six units on Thursday at its 593,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, knocked out of production by a Wednesday power blip, said people familiar with plant operations.

NEWS

– China’s consumer prices faltered and factory-gate prices shrank slightly faster than expected in September, with both indicators showing persistent deflationary pressures in the world’s second-largest economy.

– China’s crude oil imports in September grew nearly 14% from a year earlier, as refiners stepped up purchases ahead of the Golden Week travel period and manufacturing indicators improved.

– Oil prices were up on Friday after the U.S. tightened its sanctions programme against Russian crude exports, raising supply concerns in an already tight market, and global inventories are forecast to decline through the fourth quarter.

– China’s Sinopec Corp has applied to the government to swap some of its marine fuel export quotas for allowances to export light products such as diesel, jet fuel or gasoline, four China-based industry sources said this week.
Source: Reuters (Reporting by Trixie Yap; Editing by Shweta Agarwal)