Asia’s distillates markets stayed upbeat, supported by strength in ICE gasoil futures on Wednesday, while east-west spreads and margins held firm.
The diesel east-west price spread hovered at discounts of nearly $50 per metric ton, spurring more enquiries in the shipping market for swing cargoes to head west.
Freight costs have gone up in the past two days given the rise in spot enquiries for diesel loading from the Middle East or India to west of Suez markets, two shipping sources said.
Talks of China’s export quotas being issued soon surfaced, but official documents were yet to be seen at the end of the trading session.
Refining margins (GO10SGCKMc1) jumped to its highest since end-July, with paper markets and its backwardated structure drawing strength from the continuous gains in ICE gasoil futures.
Spot deals on the trading window remained brisk, propping up 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) further to 74 cents per barrel.
For jet fuel markets, the east-west arbitrage remained wide enough for swing suppliers to continue pivoting their cargoes to the west.
Regrade (JETREG10SGMc1) widened slightly to discounts of around $1.7 a barrel, as gasoil markets showed more strength in comparison with jet fuel.
SINGAPORE CASH DEALS
– One gasoil deal, one jet fuel deal
INVENTORIES
– U.S. crude oil stockpiles were expected to have fallen last week, along with distillate and gasoline inventories, a preliminary Reuters poll showed on Tuesday.
REFINERY NEWS
– Mexico’s Olmeca refinery, also known as Dos Bocas, has restarted some units after heavy rain last week caused a power outage at the plant, industry monitor IIR Energy said on Tuesday.
NEWS
– Russia’s seaborne diesel and gasoil exports fell 6% on the month in August to about 3.1 million metric tons as damage from Ukrainian drone strikes hit production, data from market sources and LSEG showed.
– The U.S. Treasury Department on Tuesday sanctioned a network of shipping companies and vessels led by an Iraqi-Kittitian businessman for smuggling Iranian oil disguised as Iraqi oil.
– Shell will not resume construction of a biofuels facility at its Shell Energy and Chemicals Park in Rotterdam after an in-depth evaluation found it would not be competitive, the company said on Wednesday.
Source: Reuters