Asia’s middle distillates markets kept steady primarily against a backdrop of thinner spot market liquidity amid freight cost concerns and uncertainty on February-March outlooks, though ICE gasoil futures gains still provided some support.
Volatile freight costs came into focus as concerns remained on how buyers and sellers will absorb the rising rates.
Several market participants discussing for February cargoes have taken a break as they lack clarity on the current freight situation, one refinery source said.
South Korean refiners were still offering a few sparse spot cargoes for end-February loading, but activity was overall slightly muted compared with early this week.
Chinese exporters have also taken a backseat, preferring to hold back on February-loading spot offers first, even though the availability remains sufficient, one trading source said.
Spot market premiums GO10-SIN-DIF declined slightly to around $2 a barrel due to a lack of aggressive bidding in the open market.
Buyers are hesitant to pay more despite all the earlier prompt cargo shortages in the last two weeks, with freight cost increments outweighing this driver.
Refining margins GO10SGCKMc1 for 10ppm sulphur gasoil closed the trading session still around $23 a barrel.
On the jet fuel front, South Korea’s SK Energy supposedly cancelled private negotiations for a Feb. 15-17 loading spot cargo in the afternoon, with some market players saying the bids could have come in below expectations.
Regrade widened for a straight fifth trading session, reflecting the expectations of the market for demand to slow even further.
The discount is also getting wider due to the rising supply, with heating oil demand declining after the winter season in northeast Asia, a second refinery source said.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Distillate stockpiles in the U.S., which include diesel and heating oil, fell by 1.4 million barrels in the week to 133.3 million barrels, versus expectations for a 300,000-barrel rise, the EIA data showed.
– Singapore’s middle distillates stocks climbed for the first time in almost a month, steadying at slightly above 6.9 million barrels as net gasoil/diesel exports slipped, official data showed on Thursday.
REFINERY NEWS
– ExxonMobil’s 191,000 barrel per day (bpd) Rotterdam oil refinery will undergo a full maintenance turnaround from the middle of February, a trade source said quoting industry monitor IIR.
– Novatek may need up to two months to repair a fuel-producing complex at its Baltic Sea Ust-Luga terminal which was damaged in a suspected Ukrainian drone attack, the Kommersant business daily reported on Thursday citing sources.
– Parkland Corp has temporarily shut down processing operations at its 55,000-barrel-per-day Burnaby refinery in British Columbia, Canada, after encountering an issue with a processing unit, the company said on Wednesday.
– A fire at a Rosneft-owned export-oriented oil refinery in the southern Russian town of Tuapse overnight has been extinguished, local officials said early on Thursday.
NEWS
– U.S. oil refiners are expected to report another quarter of lower earnings versus year-ago levels due to weaker fuel prices and after a proliferation of plant outages, analysts said.
– Shippers and trading firms are facing longer waits and higher prices for low-sulphur fuel deliveries at Singapore, the world’s top bunker hub, as refuelling demand rises due to ship diversions from Red Sea tensions, industry sources told Reuters.
– Asian refiners are selling February-loading gasoil and jet fuel cargoes at their deepest discounts in at least two months as regional freight costs jumped amid persistent Red Sea shipping disruptions, trade sources said on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Tasim Zahid)