Asia’s 10-ppm sulphur gasoil margins snapped a four-week losing streak on Friday as traders expect tighter China supply despite persistently poor demand against a backdrop of cautious trading sentiment.
Gasoil margins saw a rebound as fresh estimates for China exports came in less than 500,000 tonnes for March-loading – with a slew of shutdowns expected in domestic China starting now which could cap gasoil production, one trading source said.
Refining margins for 10ppm sulphur gasoil closed the session at $22.69 per barrel, down by 29% month-on-month compared with January levels.
However, cash differentials for 10 ppm sulphur gasoil continued the decline to $1.07 a barrel, down 63% month-on-month and 14% on the week.
Buying interest in the open market was tepid.
Likewise, jet fuel refining margins were firmer 5% week-on-week, closing the trading session at $21.24 per barrel, as positivity on domestic China demand recovery outweighed weakness in the West.
Regrade narrowed to a discount $1.45 per barrel, compared with a discount of $2.25 a barrel the previous Friday.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area rose to a fresh two-year high last week, data from Dutch consultancy Insights Global showed on Thursday. Gasoil stocks are at their highest since Feb 2021 on continued strong imports, which have nevertheless slowed down from recent weeks, said Insights Global’s Lars van Wageningen.
– U.S. crude oil inventories rose for the ninth week in a row, surging to their most since May 2021, as refiners ran less oil during a strong maintenance season, data from the U.S. Energy Information Administration showed on Thursday. Distillate stockpiles (USOILD=ECI), which include diesel and heating oil, rose 2.7 million barrels versus forecasts for a 1.1 million-barrel draw. At 121.9 million barrels, distillate supplies were at their highest since January 2022.
NEWS
– Exxon Mobil Corp XOM is attempting to start the new crude distillation unit (CDU) at its 369,024 barrel-per-day (bpd) Beaumont, Texas, refinery, people familiar with plant operations said on Thursday.
– Ecuador’s energy ministry issued a decree on Thursday declaring force majeure for its oil industry, a day after a bridge collapse forced the closure of crude and gas pipelines.
– China’s top oil and gas major CNPC has completed a months-long reshuffle with the addition of six regional offices that report to Beijing headquarters to better coordinate and supervise its sprawling global portfolio, three company executives said.
– Kuwait is set to ramp up refined oil product exports from its new Al Zour refinery in the second half of 2023 to plug Russian shortfalls in Europe and meet growing demand in Asia and Africa, industry sources and analysts said.
– Oil prices extended gains for a second session on Friday as the prospect of lower exports from Russia offset rising inventories in the United States.
– Companies in Singapore will have to consider and manage any potential impact on their business activities, transactions, and customer relationships when dealing with Russian crude oil and refined products, a government official said on Friday.
Source: Reuters