Asia’s 10 ppm sulphur gasoil margins fell by around $1 a barrel as the market is still taking some time to react amid firmer oil futures through the afternoon trading session.
Cash differentials for 10 ppm sulphur gasoil rebounded to a premium of 13 cents a barrel as some buying interest re-entered the markets amid fewer sellers in the open spot market. Mercuria snapped up two cargoes for early June delivery.
Jet fuel refining margins fell at a similar pace, but the swaps market switched to a slight contango reflecting the more bullish forecasts for July and August prices.
The change in the swap market structure also showed that regional demand is still weaker than expected, one market source said.
Regrade was almost steady at a discount of around $1.12 a barrel.
SINGAPORE CASH DEALS
– Two gasoil deals, no jet fuel deal.
INVENTORIES
– U.S. crude oil and fuel inventories fell last week, according to market sources citing American Petroleum Institute figures on Tuesday. Crude stocks fell by about 6.8 million barrels in the week ended May 19, according to the sources, who spoke on condition of anonymity. Gasoline inventories fell by about 6.4 million, while distillate inventories dropped by about 1.8 million.
– Middle distillate stockpiles at Fujairah Oil Industry Zone were up about 3.7% at 4.729 million barrels for the week ended May 22, according to industry information service S&P Global Commodity Insights.
NEWS
– A fire at the Lazaro Cardenas refinery operated by state-oil firm Petroleos Mexicanos (Pemex) in the eastern city of Minatitlan is now under control and there are no reports of injuries, the civil protection authorities of Veracruz state said late on Tuesday.
– A new oil refinery belonging to Mexico’s Pemex, a top priority of the country’s president, will again miss its promised launch date to begin production, according to an internal audit report seen by Reuters.
– Oil prices rose on Wednesday after data showed U.S. inventories and fuel supplies tightening, while a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts.
Source: Reuters