Asia’s middle distillates markets traded thinly throughout the week as a buy-sell gap largely hindered window trading activity, while a bout of mixed outlooks for March hampered price movements.
Support for 10ppm sulphur gasoil markets consistently came from wider east-west arbitrage spreads, with the front-month exchange of futures for swaps extending gains throughout the week, closing at $33-$35 per ton on Friday.
Regional players were mixed on March outlooks, but supplies are seemingly sufficient even as some refineries are slated to start maintenance as early as next week.
For jet fuel, markets were slightly more volatile as fundamentals evolved through the week, with southeast Asia demand being a key driver early on and supply being the main focus in later parts.
However, refiner spot sales for March loading were still done at premiums, reversing from earlier discounts in February, reflecting the demand due to colder-than-expected weather situations.
Deals for China and Taiwan-origin barrels closed at flat to premiums of up to 50 cents per barrel, trade sources said.
Refining margins (GO10SGCKMc1) barely moved week on week, closing at around $16.4 a barrel.
On Friday, spot cash differentials (GO10-SIN-DIF) were little changed at a discount of 37 cents a barrel, reflecting a lower-priced deal on the trading window.
Regrade (JETREG10SGMc1) narrowed by around 30 cents per barrel week on week, reflecting the sudden surge in both kerosene and jet fuel demand regionally.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– U.S. crude oil stockpiles rose while gasoline and distillate inventories fell last week as seasonal maintenance at refineries led to lower processing, the Energy Information Administration said on Thursday.
– Gasoil and diesel stocks fell by 1.4% to 2.54 million tons as colder weather pushed inland demand higher, Wageningen said.
NEWS
– U.S. oil and biofuel groups banded together this week to urge the new Trump administration to increase volume of renewable fuels that must be blended into the nation’s fuel mix in 2026 and beyond, according to a letter seen by Reuters.
– Top U.S. refiners are poised to seek alternative sources for heavy, sour crudes, including running more domestic grades, as they await clarity around U.S. President Donald Trump’s threatened tariffs on imports from the nation’s top crude suppliers Canada and Mexico, executives said.
Source: Reuters