Asia’s middle distillates markets resumed brisk spot activity both on window and off-screen, with jet fuel paper market structures weakening further and spot discounts hitting its widest since October last year.
June spot offers from China’s refiners resurfaced, with one major offering jet fuel. Diesel offers are still scant given the squeezed export margins overall.
For now, the majority of China’s June exports is still expected to be focused on jet fuel due to healthy sale margins outside of home, several trade sources said.
There should be some pressure for a handful of Chinese refiners to ramp up their exports soon, as they need to try and hit their quota levels, one of the sources added.
Offers from GS Caltex emerged again, with the refiner selling more June loading spot cargoes via a third sales tender so far.
On the demand side, some buying interest from Vietnam for end-May and early June cargoes was briefly in the spot market since late last week.
Refining margins barely moved, closing at around $15.6 a barrel.
On the trading window, 10ppm sulphur gasoil spot activity remained curtailed with bids and offers remaining scant. Cash differentials for the fuel slipped to around 40 cents per barrel.
Meanwhile, jet fuel cash markets came under severe pressure given the window deals done in discounts and persistently lower-priced spot offers for June cargoes. Spot cash differentials were at discounts of 28 cents per barrel at the market’s close.
Regrade widened even further as well, to discounts of slightly above $1 a barrel.
SINGAPORE CASH DEALS
– No gasoil deals, 2 jet fuel deals
INVENTORIES
– U.S. crude oil stocks rose last week while gasoline and distillate inventories fell, market sources said, citing American Petroleum Institute figures on Tuesday.
– Middle distillates stocks held at Fujairah Oil Industry Zone slipped to a three-year low of 1.295 million barrels in the week ended May 19, according to industry information service S&P Global Commodity Insights.
REFINERY NEWS
– Exxon Mobil said on Tuesday it was working to resolve an issue at its 275,000-barrels-per-day refinery in Joliet, Illinois.
NEWS
– An expected stronger hurricane season than average raises the risk of weather-related production outages in the U.S. oil industry, the U.S. Energy Information Administration said on Tuesday.
– Indonesia’s Pertamina has been importing Russian crude since last year directly to its refineries, the refinery’s CEO Taufik Aditiyawarman told reporters on the sidelines of IPA 2025.
– India’s Russian crude oil imports will hit close to 1.8 million barrels per day in May, the highest in 10 months, ship tracking data from Kpler showed, after refiners snapped up more light grades such as ESPO Blend.
Source: Reuters