Asia’s middle distillates markets were little changed on Wednesday, with participants weighing their expectations of steady February supplies and the sustainability of some prompt demand before mid-month against softer futures prices.

Some February spot tenders are expected in the next two days, with at least two northeast Asian refiners likely to kick start sales in line with earlier expectations.

Fluctuations could stay minimal this week given mixed outlooks in the market and an almost status quo situation in demand-supply funmdamentals for February, one trading source said.

However, spot cash premiums slipped back to below $1 a barrel as prompt swaps demand faltered against a backdrop of slightly less aggressive buying interest in the physical markets for January spot lots.

A lack of lower-priced sellers, however, capped overall weakness, though trading activity was slightly more minimal from the previous session.

Refining margins barely moved from the previous session and closed at slightly above $20.50 a barrel on Wednesday.

Jet fuel refining margins were likewise almost unchanged, but regrade improved slightly to a discount of 35 cents a barrel, though some uncertainties in China-origin exports for February continued to weigh on the market.

SINGAPORE CASH DEALS

No gasoil or jet fuel deal.

INVENTORIES

Analysts in a Reuters poll estimated stockpiles of gasoline were up by about 700,000 barrels last week, and distillate stockpiles, which include diesel and heating oil, were seen increasing by about 900,000 barrels.

Middle distillates stockpiles held at Fujairah Oil Industry Zone declined to almost a two-month low of 1.987 million barrels in the week ended Jan. 1, according to industry information service S&P Global Commodity Insights.

NEWS

Saudi Arabia may slash price premiums on all crude grades it sells to Asia in February to one-year-lows despite the escalation of tensions in the Red Sea, as concerns intensify that supply may outpace demand.

India’s northern city of Chandigarh imposed restrictions on the sale of petrol and diesel at fuel stations on Tuesday after a strike involving drivers of fuel tankers disrupted supply in the region, the local government said.

Iranian-backed Houthi militants fired two anti-ship ballistic missiles into the Southern Red Sea, though no damage was reported, the U.S. Central Command (CENTCOM) said late on Tuesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Sonia Cheema)