Asia’s 10ppm sulphur gasoil cracking margins declined for the third consecutive session to slightly above $27 a barrel as more talks of easing supply tightness in the West emerged, though the market remains in a backwardated structure.
Sentiment was shaken by a possible resumption of Russian exports soon, with weakness in the ICE gasoil futures prices evident as well. This was against a backdrop of a closed east-west arbitrage since the start of the week.
A portion of the market expects Asian supplies to remain steady for November, with more northeast Asian refiners to kick start sales discussions soon, weighing on supply side fundamentals.
Spot premiums for 10ppm gasoil came under pressure, falling 4 cents day on day, as a key oil major sold off three spot lots at lower premiums for second-half October loading.
Jet fuel refining margins fell at an even quicker pace, hitting more than a two-month low, against a backdrop of thin trading activity and limited physical spot discussions.
Regrade discount narrowed slightly to around $2.40 a barrel as the weakness in gasoil was more prevalent.
SINGAPORE CASH DEALS
– Three gasoil deals, no jet fuel deals.
INVENTORIES
– Crude stocks fell by about 4.2 million barrels in the week ended Sept. 29, according to market sources who spoke on condition of anonymity citing American Petroleum Institute figures on Tuesday. Gasoline inventories gained by 3.9 million barrels, while distillate inventories rose by about 350,000 barrels.
– Middle distillates stocks at Fujairah Oil Industry Zone were near a two-month high of 2.331 million barrels for the week ended Oct. 2, according to industry information service S&P Global Commodity Insights.
REFINERY NEWS
– Motiva Enterprises MOTIV.PA plans to finish by early November a planned overhaul of the shut small crude distillation unit (CDU) at its 626,000-barrel-per-day (bpd) Port Arthur, Texas refinery, the nation’s largest, said people familiar with plant operations.
– A planned shutdown of the large crude distillation unit (CDU) at ExxonMobil Corp’s 564,440 barrel-per-day (bpd) Baytown, Texas, refinery is scheduled to continue through October, said people familiar with plant operations.
NEWS
– Oil edged lower on Wednesday ahead of a panel meeting of OPEC+ ministers, as the market weighed expectations of supply tightness against fears that high interest rates could reduce fuel demand.
– The Russian government is ready to partially lift its ban on diesel exports in coming days, the daily Kommersant reported on Wednesday, citing unidentified sources.
– Saudi Arabia will continue with its voluntary output cut of one million barrels per day (bpd) for the month of November and until the end of December 2023.
– Russia will consider next month whether to deepen its voluntary oil production cuts or increase output, while separately continuing its current export cuts until the end of the year, Deputy Prime Minister Alexander Novak said on Wednesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shailesh Kuber)