Asia’s middle distillates markets on Wednesday continued to see a string of spot activity, with refiner sales emerging, though spot discussion levels remained under pressure amid bearish expectations.

One of the key oil majors in South Korea emerged with end-September sales, with a tender closing today.

The paper market structure changed mostly to contango until 2026, as traders continued to price in their bearish expectations on fundamentals.

Refining margins declined by more than $1 a barrel to around $12.50 a barrel at the market’s close.

On window, cash discounts were back under pressure – slipping to 60 cents a barrel – as strong selling interest remained.

Gasoil open window deals resurfaced after a week-long thin trading activity, with trading house Petrochina buying a prompt loading cargo at larger discounts than before.

On the jet fuel front, more activity is expected in the next few trading sessions.

Regrade was little changed at discounts of 10 cents a barrel.

SINGAPORE CASH DEALS

– One gasoil deal, no jet fuel deal

INVENTORIES

– U.S. crude oil and gasoline inventories fell while distillates rose last week, according to market sources citing American Petroleum Institute figures on Tuesday.

– Middle distillates stocks at Fujairah Oil Industry Zone rose to a two-month high to 3.146 million barrels in the week ended Sept. 9, according to industry information service S&P Global Commodity Insights.

NEWS

– The head of shipping at global trading firm Vitol said on Wednesday that large quantities of uninsured oil are currently afloat on ships due the rise of the dark fleet in the aftermath of the Russia-Ukraine war.

– Trafigura expects more demand for clean tankers to continue, with 12% of its current very-large-crude-carrier (VLCC) fleet trading in the clean market, a company executive told the annual APPEC conference on Wednesday.

– Francine strengthened into a hurricane on Tuesday night, the U.S. National Hurricane Center said, as it prompted Louisiana residents to flee inland and oil and gas companies to shut in Gulf of Mexico production.

– Global oil demand is set to grow to a bigger record this year while output growth will be smaller than prior forecasts, the U.S. Energy Information Administration (EIA) said on Tuesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shailesh Kuber)