Asia’s middle distillates markets recorded similar trading momentum from the previous session, but prices gave back some earlier gains amid weaker ICE gasoil performance, though more August cargoes are slated to be offered by the end of the week.
Uncertainty clouded the markets despite little changed regional market fundamentals, with traders also eyeing the supply situation in the West as a near-term driver.
Meanwhile, Taiwan’s Formosa Petrochemical Corp sold one 750,000-barrel cargo for 10ppm sulphur gasoil loading in August, three trade sources said.
Refining margins for the fuel slipped by almost 50 cents a barrel to close at slightly below $18 a barrel, a reflection of the weaker trading activity.
Cash differentials however continued its movement in the discounted territory owing to the contango market structure and readily lower-priced offers from Vitol in the open window.
Spot physical buying interest was scant against a backdrop of softer ICE gasoil and paper market performance.
Jet fuel physical discussions deepened into a further discount as sellers remained active in the open trading window. A second deal was done at a wider discount from the previous session.
Regrade narrowed slightly to a discount of around $1.10 a barrel after losses in the gasoil paper markets were heftier than jet fuel in comparison.
SINGAPORE CASH DEALS
– No gasoil deal, 1 jet fuel deal
INVENTORIES
– U.S. crude oil and distillates inventories fell last week while gasoline rose, according to market sources citing American Petroleum Institute figures on Tuesday.
– Middle distillates stocks at Fujairah Oil Industry Zone gained slightly to 2.659 million barrels in the week ended July 1, according to industry information service S&P Global Commodity Insights.
REFINERY NEWS
– Lubricant shipments from Idemitsu Kosan’s 5019.T Chiba refinery, near Tokyo, have been suspended due to a fire on Tuesday, but other facilities including a crude distillation unit (CDU) are operating normally, a company spokesperson said.
NEWS
– The Civil Aviation Authority of China (CAAC) launched the country’s first technical centre for sustainable aviation fuel (SAF) that focuses on standard setting and product research, a report published in the aviation regulator’s news channel showed late on Tuesday.
– The U.S. Department of Energy said on Tuesday five companies including British oil giant BP and Swiss commodity trader Vitol have been awarded contracts for the sale of 1 million barrels of gasoline from the U.S.-managed stockpile in northeastern states.
– Oil prices rose on Wednesday after industry data showed a bigger-than-expected draw in U.S. crude stockpiles, while the market kept tabs on flaring tensions in the Middle East.
Source: Reuters (Reporting by Trixie Yap; Editing by Mrigank Dhaniwala)