Asia’s middle distillates markets started to see a glimpse of September activity, though open window trading liquidity was at a slower pace week on week as the swaps and futures prices traded in a narrow range.
September trading activity was nearly in full swing, though some sellers were still lingering for August spot cargoes. Discounts however were less steep compared with July spot cargoes given prevailing freight cost declines and slightly better east-west arbitrage economic incentive.
Hopefully, some more Middle East and India cargoes can head west for August and that will alleviate the regional supply glut, one source said.
Refining margins lost almost 80 cents a barrel week on week, reflecting the continuously weak market fundamentals for prompt months.
In the open trading window this week, deals were fewer with around 500,000 barrels of jet fuel sold, together with 300,000 barrels of 10ppm sulphur gasoil.
On Friday, spot market discounts were little changed at slightly more than 30 cents a barrel, a decline of 5 cents week on week.
In jet fuel markets, traders were watching to see if a larger chunk of cargoes will head to Europe from swing supplies such as India and the Middle East from August, given the decline in freight costs on that trade route.
Regrade was basically stagnant mostly through the week, hovering at discounts of 90 cents to 95 cents a barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal
INVENTORIES
– Independently held refined oil products stocks in storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by 1% in the week to Thursday, data from Dutch consultancy Insights Global showed. Gasoil stocks were stable on the week at 2.01 million tons, breaking a five-week streak of stockdraws. ARA/
REFINERY NEWS
– Motiva Enterprises plans to restart a gasoline-producing fluidic catalytic cracker (FCC) at its 626,000-barrel-per-day (bpd) refinery in Port Arthur, Texas by next week, people familiar with the plant operations said on Thursday.
– Exxon Mobil’s 251,800-barrel-per-day refinery in Joliet, Illinois, started heating its units this week, according to industry monitor IIR.
– Japan’s biggest refiner, Eneos Corp, conducted an unplanned shutdown of the 145,000-barrels-per-day crude distillation unit at its Sendai refinery in northern Japan on Aug. 1, a company spokesperson said on Friday.
NEWS
– China’s slumping consumption of diesel, as the use of LNG-powered trucks grows, is weighing on domestic fuel demand, with forecasters warning of further risks from a sluggish economy hobbled by a prolonged crisis in the property sector.
– China’s newest mega refiner Shandong Yulong Petrochemical has recently bought three Russian crude oil cargoes for September arrivals, shoring up inventory ahead of a planned test operation of its new plant, two trading sources said.
– Indonesia’s biodiesel consumption in the first half of 2024 reached 6.12 million kilolitres, data from the energy ministry showed on Friday.
Source: Reuters (Reporting by Trixie Yap; Editing by Vijay Kishore)