Asia’s spot cash differentials GO10-SIN-DIF recovered from the six-month lows of the previous two days as a backwardated price structure resurfaced in the paper swaps market, though they continued trading at a discount of 5 cents per barrel.
There are expectations of weak fundamentals persisting for the whole of December, resulting in the current spot discounts, two trade sources said.
An accumulation of stockpiles in Singapore could have also led to a slight flipping in the market structure between backwardation and contango over the past few days.
Cracking margins for the fuel GO10SGCKMc1 rebounded almost 10% from the previous session due to some slight recovery in the December swaps and ICE gasoil futures market in the afternoon trading session.
Despite a lack of activity in the jet fuel market, Regrade JETREG10SGMc1 narrowed back to a discount of 35 cents a barrel. Some trade sources attributed it to the values trading the positive regrade spread in northwest Europe and strong heating oil performance in some parts of the U.S.
SINGAPORE CASH DEALS O/AS
– No deals for both fuels.
INVENTORIES
– U.S. crude oil stockpiles jumped last week, while gasoline inventories posted a surprise draw as refineries picked up runs amid seasonally strong demand, the Energy Information Administration said on Wednesday.
– Singapore’s middle distillates stockpile climbed further by 4.8% week on week as net exports of the gasoil extended their decline for a fourth straight week, official data showed on Thursday.
NEWS
– Venezuela’s state-run oil company PDVSA is offering to sell up to 1 million barrels of Corocoro crude through an intermediary, sources said on Wednesday, which could become the first sale of that grade in two years.
– U.S. oil major Exxon Mobil is planning to invest up to $15 billion in a petrochemical project and carbon capture and storage (CCS) facility in Indonesia, President Joko Widodo said in a presidential palace statement on Thursday.
– Parts of the river Rhine in Germany have been closed to shipping because of a rise in water levels following recent heavy rain, German authorities said on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Tasim Zahid)