Asia’s 10-ppm sulphur gasoil and jet fuel margins posted a fifth straight week of losses on Friday as expectations of dismal supply fundamentals continued to weigh on the market.
Supplies were ample, despite earlier expectations of a switch in production to gasoline, because of accumulated inventories from before and the current backwardated price structure, two traders said.
Sellers are hoping to capitalise on the higher prices for May to clear their inventories for fear of the market turning into a contango structure, where forward prices are lower than prompt prices.
Thin liquidity however capped weakness to around 7% week on week.
Refining margins for 10ppm sulphur gasoil closed the trading session at $14 a barrel, while jet fuel cracks were at $12.79 a barrel.
Cash differentials for 10 ppm sulphur gasoil went back to positive, after flipping to a discount a day earlier, as one spot buyer came back on the expectation that the market was close to bottoming out.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– Gasoil inventories held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area were little changed in the week to Thursday at 2.36 million tonnes, data from Dutch consultancy Insights Global showed on Thursday.
NEWS
– Chinese state oil giants and major private refiners are sweeping up more Russian crude, supporting prices and forcing smaller independents to seek out cheap alternatives such as Iranian oil, according to trade sources and shipping data.
– Several Asian petrochemical producers plan to switch a portion of their feedstock from naphtha to cheaper liquefied petroleum gas (LPG) late in the second quarter as the price gap between the two fuels has widened, refinery and trade sources said.
– Russia maintained its position as China’s top oil supplier in March, Chinese government data showed on Friday, as buyers continued to snap up sanctioned ESPO and Urals shipments at steep discounts.
– The flow of Asia’s spot Middle East crude oil trade deals slowed this week after refiners’ margins hit multi-month lows, curbing buyers’ appetite for incremental supplies, according to trade and refining sources.
Source: Reuters