Asia’s middle distillates markets recorded a flurry of paper market activity, though physical cargoes were thinly traded on the window amid talks of tightening supplies from run cuts and likely some unplanned outages.
Paper markets flipped back into backwardation, with strong buying interest for October emerging as some traders attributed it to month-end short-covering amid talks of run cuts still prevalent.
There were expectations of more cuts to be implemented for October in northeast Asia, according to one trade source, which could be supportive.
Some unexpected maintenance in Indonesia also propelled October buying interest in the paper markets, in addition to lower stockpiles in the Fujairah storage region. Indonesia’s key importer sought up to 1.1 million barrels of 2500ppm sulphur first-half October gasoil deliveries compared with the limited volumes they bought for September arrival earlier.
Meanwhile, offers were scant from China oil majors so far for October, ahead of the long holidays next week.
Refining margins bounced back to $12.70 a barrel, reflectingthe weakness in crude futures and some persistent strength in the paper markets during the afternoon trading session.
Cash differentials gained for the first time in this week’s trading session a narrower discount of 42 cents a barrel, reflecting the slight uptick in mid-October buying interest.
Regrade widened back to a discount of 66 cents a barrel as a reflection of the better performance in ICE gasoil markets and limited activity on the jet fuel front.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– U.S. crude oil and fuel stockpiles fell last week, according to market sources citing American Petroleum Institute figures on Tuesday.
– Middle distillates inventories held at Fujairah Oil Industry Zone dipped to a six-month low of 1.5 million barrels in the week ended Sept. 23,according to industry information service S&P Global Commodity Insights.
NEWS
– Libya’s crude oil exports have slumped to about 400,000 barrels per day (bpd) this month from August’s 1.02 million bpd, port and shipping data show, as the OPEC member grapples with a political crisis that has slashed output.
– Oil prices fell on Wednesday as investors reassessed the ability of China’s stimulus plans to boost the economy enough to drive more fuel demand growth in the world’s largest crude importer.
– OPEC raised its forecasts for world oil demand for the medium and long term in an annual outlook, citing growth led by India, Africa and the Middle East and a slower shift to electric vehicles and cleaner fuels.
Source: Reuters (Reporting by Trixie Yap; Editing by Tasim Zahid)