Asia’s middle distillates markets weakened slightly, with spot activity mostly focused on the tenders front as evidenced from the limited fluctuations in the paper swaps and ICE gasoil futures markets.
Some regional buyers in southeast Asia emerged for prompt February cargoes, in line with earlier expectations, bolstering overall spot market activity on the tenders front.
More tenders should emerge at the end of the week for March loading parcels and there could be more visility on the market’s outlook, one trading source said.
Freight costs were still averaging around $100 per metric ton for shipping long-range vessels that can carry 60,000-90,000 tons between India/Middle East to Europe, according to shipbroking sources.
Some sellers could consider sending cargoes eastward for February again because of this, a second source said.
Spot cash premiums GO10-SIN-DIF declined for the third straight session with a buy-sell gap persisting, despite plentiful of buyers in the open spot trading market. Only one major trader had lower-priced offers.
Jet fuel refining margins JETSGCKMc1 slipped by around 2% from the previous trading session.
Some China-origin jet fuel cargoes remained sold at discounts of more than $2.50 a barrel for February shipment due to the ongoing high shipping costs in the market.
Regrade JETREG10SGMc1, however, narrowed for a second straight session to around $2 a barrel after hitting a 4-month high two days earlier, given the variety of arbitrage outlets compared with gasoil.
SINGAPORE CASH DEALS O/AS
– No deals for both fuels
INVENTORIES
– U.S. crude oil and distillate inventories fell last week, while gasoline stockpiles rose, according to market sources citing American Petroleum Institute figures on Tuesday. API/S
– Middle distillates stocks at Fujairah Oil Industry Zone fell to a near one-month low of 2.157 million barrels for the week ended Jan. 29, according to industry information service S&P Global Commodity Insights.
NEWS
– A reimposition of U.S. sanctions on Venezuela’s oil and gas sectors would hurt the OPEC country’s ability to collect cash from its oil exports, crimp new energy investments and raise the risks of domestic fuel scarcity, analysts and executives said.
– To avoid the Red Sea, the supertanker Grand Bonanza set out early this month on a roughly 40-day journey carrying 1.8 million barrels of Abu Dhabi crude for TotalEnergies from the United Arab Emirates all the way around Africa to France.
– Chevron CVX.N is sending cargoes of Kazakhstan’s CPC Blend oil to Asia around Africa’s Cape of Good Hope rather than via the Red Sea to avoid the risk of attacks by Yemen’s Houthis, according to three industry sources and LSEG ship-tracking data.
– Traders were also diverting cargoes with Russian oil products around Africa to avoid the Red Sea, data from market sources and LSEG showed.
Source: Reuters (Reporting by Trixie Yap; Editing by Shinjini Ganguli)