Asia’s middle distillates markets softened mostly against a backdrop of thinning spot trading liquidity and softer ICE gasoil fu-tures, though some regional spot tenders did emerge for November.
A slew of sale tenders emerged from south Asia as some refiners started offering November spot lots, but overall spot market activity remained subdued.
Talks of some traders already closing their positions for the year could have resulted in muted market activity these two weeks.
Indonesia’s demand for November spot lots remained robust, with more requirements from state-owned refiner Pertamina for higher-sulphur gasoil.
Markets were also watching China exports for November and December loading. While November volumes look to be on a de-clining trend from October given better local demand, December exports could surge again if the export margins remain healthy.
Refining margins fell by almost $1 a barrel, giving back all of the previous session’s gains.
Cash differentials for 10 ppm gasoil were little changed as well because of the almost steady backwardation between November and December swaps.
Ready sellers in the prompt early November loading market also limited the fluctuations in cash premiums.
Jet fuel refining margins closed the trading session at $22.76 a barrel, though arbitrage discussions were minimal given the lower profits from a month ago.
The arbitrage window remained open for sellers, but some slowing demand from the West has hindered discussions, one north-east Asian refinery source said.
Regrade remained steady at around a discount of $2.85 a barrel.
SINGAPORE CASH DEALS
– No deals for both fuels.
INVENTORIES
– Analysts polled by Reuters estimated stockpiles of gasoline were down by about 1.7 million barrels last week, while distillate stockpiles, which include diesel and heating oil, were seen decreasing by about 1.6 million barrels.
REFINERY NEWS REF/OUT
– Pemex returned the main crude distillation unit (CDU) to production on Sunday at its 312,500 barrel-per-day Deer Park, Texas refinery, people familiar with plant operations said on Monday following a nearly one-week outage.
– Repairs to a reformer damaged in a fatal May fire at Marathon Petroleum’s MPC.N 593,000 barrel-per-day (bpd) Galveston Bay refinery in Texas are expected to continue to at least mid-November, people familiar with plant operations said on Monday.
NEWS
– Oil prices rose on Tuesday, recovering some of the previous day’s losses, as investors remained nervous that the Israel-Hamas war could escalate into a wider conflict in the oil-exporting region, causing potential supply disruptions.
– Global energy trader Vitol will be delivering specialised bunker barges at Singapore in early 2024, and will be able to offer a range of biofuel blends through its subsidiaries V-Bunkers and Vitol Bunkers, the company said in a statement on Tuesday.
– Mexico has put restrictions on the import of dozens of refined petroleum and petrochemical products to curb fuel theft and adulteration, its official gazette showed on Monday, including certain types of gasoline and diesel, jet fuel and additives.
– World fossil fuel demand is set to peak by 2030 as more electric cars hit the road and China’s economy grows more slowly and shifts towards cleaner energy, the International Energy Agency said, undercutting the rationale for any rise in investment.
Source: Reuters (Reporting by Trixie Yap; Editing by Shilpi Majumdar)