Asia’s gasoil markets went on a general uptrend this week, albeit a shaky one, with margins hitting an eight-month high buoyed by higher cracks in the West amid tight supply expectations into the fourth quarter of the year.
A slew of prompt supply disruptions stemming from plant production troubles, mostly in the West, continued to lead market players to keep their long positions towards the month-end closing for trades.
This was despite robust crude runs in northeast Asia, with more spot lots being offered for September loading from at least three refiners this week, including China state-owned majors.
Refining margins for the transportation and industrial fuel closed the Friday trading session at slightly above $33 a barrel.
Spot cash premiums still averaged around $2 a barrel, though this was still 20% firmer than the average a week earlier.
Regrade narrowed to a two-month low to reflect the tighter jet fuel prompt supply fundamentals and higher cracking margins compared to gasoil, though buyer interest varied across the regions.
Australia-based importers were heard to be the key buyer snapping up jet fuel spot cargoes this week.
Some ready supplies from northeast Asia including China for early September shipments kept a lid on overall gains.
SINGAPORE CASH DEALS
– No deals for gasoil or jet fuel
INVENTORIES
– Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub declined by 3% in the week to Thursday, data from Dutch consultancy Insights Global showed.
NEWS
– Oil was headed for a second week of declines even as it rose on Friday, as the dollar firmed before a speech by Federal Reserve Chair Jerome Powell while concerns over tight supply eased.
– Rising prices of a popular Russian crude sold to China are poised to peak soon as more independent refiners are likely to switch to cheaper oil from Iran which has ramped up exports to fresh 4-1/2 year highs in August, several trade sources said.
Source: Reuters (Reporting by Trixie Yap; Editing by Shinjini Ganguli)