Asia’s 10 ppm sulphur gasoil market registered little activity for a second consecutive session on Tuesday, with participants awaiting August sellers to start discussions.
August supply expectations are on the rise, given that most refineries will have emerged from maintenance season, while the outlook for Chinese domestic demand remains unclear, two traders said.
Spot premiums GO10-SIN-DIF for July cargoes were supported at 79 cents a barrel on some buying, though there was only one bid and two offers throughout the afternoon trading session.
Chinese energy major Unipec continued to offer lower prices for the second straight day, capping market gains.
Refining margins GO10SGCKMc1 for low-sulphur gasoil fell for a fourth session to $16.28 a barrel, tracking weakness in ICE gasoil futures and thin spot activity.
Jet fuel refining margins JETSGCKMc1 fell to about $15 a barrel, tracking gasoil performance, though some support remained from potential demand coming from the U.S. amid healthy selling margins to that region.
Regrade JETREG10SGMc1 was steady around a discount of $1.20 a barrel.
SINGAPORE CASH DEALS O/AS
– One gasoil deal, no jet fuel deals.
INVENTORIES
– U.S. crude oil and gasoline inventories were expected to have declined last week while distillate stockpiles were expected to have risen, a preliminary Reuters poll showed on Monday. Analysts estimated stockpiles of gasoline USOILG=ECI were down by about 1.1 million barrels last week while distillate stockpiles USOILD=ECI, which include diesel and heating oil, were forecast to have risen by about 500,000 barrels. EIA/S
NEWS
– Oil prices rose on Tuesday as markets weighed August supply cuts by top exporters Saudi Arabia and Russia against mixed views on economic data that could hint at weaker crude demand.
– Temperatures are expected to rise further across large parts of the world after the El Nino weather pattern emerged in the tropical Pacific for the first time in seven years, the World Meteorological Organization said on Tuesday.
Source: Reuters (Reporting by Trixie Yap, Editing by David Goodman)