Asia’s 10 ppm sulphur gasoil cash premiums fell for the seventh straight week as the market’s backwardated price structure eased significantly and overall buying activity remained curtailed against a closed east-west arbitrage spread.

Cracking margins for 10 ppm sulphur gasoil reversed all gains in the past two weeks, closing slightly above $20 a barrel.

Supply expectations for the fuel were mixed, with steady supply from South Korea offset by potentially fewer spot cargoes from Taiwan and China for December loading.

China’s state-owned oil majors were still facing limited quota availability for both November and December loading and that is affecting their export balance, two China-based trade sources say.

The November east-west arbitrage, typically measured by the exchange of futures for swaps (EFS) spread, steadied at around $60 a metric ton, while the forward spread was at around $30 a metric ton.

It was not lucrative for Asian sellers to export cargoes to the West for now, some analysts said.

The price differential between 10ppm sulphur gasoil and jet fuel physical cargo prices turned positive as a result, despite the slight regrade paper swap discounts still being present. Thatshould encourage some refiners to swap to jet fuel or kerosene production soon, ahead of the winter heating demand expectations.

Jet fuel refining margins also reversed the past two weeks of gains and slipped to slightly below $20 a barrel, but overall activity for the market was limited compared with gasoil.

SINGAPORE CASH DEALS
– One 2500ppm sulphur gasoil deal, no jet fuel deal.

INVENTORIES
– Total oil products stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by 4% in the week to Thursday, data from Dutch consultancy Insights Global showed, hitting their lowest since July 2022.ARA/

NEWS
– Oil prices were little changed on Friday after rising in the previous session but are set to fall for a third week as concerns of supply disruptions from the Israel-Hamas conflict have ebbed allowing demand worries to reassert themselves. O/R

– Russian fuel producers have been told by the government to prepare for the scrapping of all remaining restrictions on the export of diesel and gasoline, three industry sources told Reuters on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Eileen Soreng)