Asia’s middle distillates markets were eyeing June spot offers from regional refiners, while the pace of window activity was upbeat.
However, markets turned slightly mixed, amid some trader cautiousness on rising diesel swing supplies coming into Asia for May.
India’s May 10 ppm diesel exports to Asia-Pacific are slated to tick up to almost 500,000 metric tons, compared with around 320,000 tons in April, Kpler shiptracking data showed.
This could balance out some of Asia’s supply tightness up till June, one trade source said.
However, higher-sulphur diesel demand could remain supported due to marine gasoil requirements, multiple trade sources said.
Diesel refining margins slipped back below $16 a barrel, reversing some of previous session’s gains, as crude markets surged at a quicker pace.
Cash differentials dipped slightly, reflecting the weaker paper market structure, though a lack of higher-priced buying interest weighed slightly.
More offers surfaced on the trading window, putting further pressure on spot premiums, with levels dipping to 84 cents per barrel.
On the jet fuel front, the arbitrage between Asia and the U.S. west coast did widen from the previous trading session, with some trade sources attributing it to a refinery fire in that region.
Regrade narrowed to discounts of 76 cents per barrel.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– U.S. crude oil stockpiles, distillate and gasoline inventories likely fell last week, a preliminary Reuters poll showed on Monday.
REFINERY NEWS
– India’s Mangalore Refinery and Petrochemicals Ltd MRPL.NS will shut its 144,000 barrels-per-day (bpd) crude distillation unit from mid-May, a refinery source and four traders said.
– A fire that broke out at Valero’s 145,000-barrel-per-day refinery in Benicia, California, has been extinguished, the company said on Monday.
NEWS
– Oil prices rebounded over 1% on Tuesday with technical rebound and dip buying after a drop in prior session by OPEC+ decision to accelerate increases in output, although concerns about the market surplus outlook persisted.
– Drivers in California pay higher prices at the pump than any other state in the country due to supply issues, costs from environmental compliance and fuel requirements, and high state taxes and fees, the U.S. Energy Information Administration said on Monday.
– India’s diesel exports likely hit their lowest level in over a decade in April as major exporter Reliance cut refining output for maintenance at a time when domestic demand was robust, trade sources and analysts said.
Source: Reuters