Asia’s middle distillates markets slipped for a second straight session as weakness in the gasoil futures and paper swaps market continued on position clearing, against a backdrop of volatile oil futures and limited physical cargo discussions.

Cash differentials GO10-SIN-DIF slipped to a near three-month low, closing the trading session at $1.47 a barrel. A buy-sell gap hindered deals.

Discussions for physical cargoes remained subdued in the open trading market and spot tenders for November parcels turned scant, weighing on market activity further.

Refining margins for 10ppm sulphur gasoil closed the session 7% lower from the previous session.

Jet fuel refining margins fell as well but at a slower pace in comparison with some prompt sell-offs in the November paper swap market for gasoil.

Regrade narrowed slightly to a discount of $2.35 a barrel as a result.

SINGAPORE CASH DEALS

– No deals

INVENTORIES

– Crude stocks fell by about 2.7 million barrels in the week ended Oct. 20, according to market sources citing American Petroleum Institute figures on Tuesday, on the condition of anonymity. Gasoline inventories dropped by 4.2 million barrels, while distillate inventories fell by about 2.3 million barrels. API/S

– Middle distillates’ stockpiles at Fujairah Oil Industry Zone hit a two-week high of 2.139 million barrels for the week ended Oct. 23, according to industry information service S&P Global Commodity Insights.

NEWS

– China has set a minimum size for new oil refineries and will ban small crude processors that claim to be chemicals or bitumen producers under its plan to limit total capacity at 1 billion tons by 2025, its state planner said on Wednesday.

– Oil fell for a fourth day on Wednesday as concerns about slowing European demand offset worries about Middle East supply disruptions stemming from the Israel-Hamas conflict in Gaza.
Source: Reuters (Reporting by Trixie Yap; Editing by Shweta Agarwal)