Asia’s middle distillates markets kickstarted the week with a slower trading pace both on a physical and paper front, despite price gains being evident from the previous trading session.
The gasoil market was slightly still catching up with gains in the crude markets and also supported by a slightly widening east-west arbitrage in the past four trading sessions, one source said.
Traders were also awaiting China’s export estimates for September for a direction.
Spot market discounts GO10-SIN-DIF however took a dip again to 27 cents a barrel, given that fixed paper swaps prices climbed despite a narrower contango between September and October swap prices.
Lower-priced offers were readily available from several key oil majors, weighing on the open market discounts further.
Meanwhile, refining margins GO10SGCKMc1 were little changed at around $14.20 a barrel.
Some cautiousness re-emerged in the jet fuel market, given that the arbitrage price spread between Asia and the US west coast has narrowed slightly compared with the last three trading sessions.
The arbitrage will have to be sustainable for Asian prices to go up further, one refinery source said.
Regrade JETREG10SGMc1 was little changed at a discount of 37 cents a barrel as a result.
SINGAPORE CASH DEALS O/AS
– No deals for both fuels.
NEWS
– China’s Sinopec posted a 2.6% rise in net profit for the first half of the year, it said on Sunday, as record oil and gas output compensated for falling domestic demand for refined fuel and petrochemicals.
– Oil prices extended gains on Monday on fears a major spillover in fighting from the Gaza conflict into the Middle East could disrupt regional oil supplies, while approaching U.S. interest rate cuts lifted the global economic and fuel demand outlook.
– Russia has increased fuel oil exports in August so far after completing maintenance at some oil refineries, the Kommersant daily reported on Monday, citing information from data and analytics group Kpler.
– Indonesia president-elect Prabowo Subianto hopes to implement mandatory 50% palm oil-based biodiesel blending by early next year, which he said would cut fuel imports by $20 billion per year.
Source: Reuters (Reporting by Trixie Yap; Editing by Vijay Kishore)