Asia’s middle distillates markets were mixed against a backdrop of slightly slower open market discussions on the first day of the trading week and overall differing outlook for gasoil and jet fuel.
Spot market premiums for 10ppm sulphur gasoil advanced to more than a two-month high due to some prevailing demand for prompt spot lots in the open market.
A lack of offers also contributed to gains. Some cargoes for early February loading were earlier sold at a slight premium on a free-on-board basis, reflecting the market’s backwardation.
Refining margins for the transport and industrial slipped back to below $23 a barrel, reflecting weakness in the ICE gasoil markets and softer crude futures.
Jet fuel refining margins also fell close to $21.50 a barrel, though trading activity was limited and buying interest for early February cargoes stayed upbeat.
The emergence of some resurgent demand from regional buyers for heating and aviation fuel purposes limited overall market weakness.
There was talk of at least two spot cargoes being bought by Japanese and Australian refiners for February shipment from either China or South Korea, two sources said.
Regrade, as a result, widened to more than a two-month high given the prevailing strength of gasoil swaps prices and futures, though jet fuel fundamentals were in a more rosy state.
SINGAPORE CASH DEALS
– No gasoil or jet fuel deals.
REFINERY OUTAGES
– Thai Oil is planning to shut one of the three crude distillation units (CDU) at its Sriracha refinery complex later on Monday for repairs after production issues cropped up early last week, two sources familiar with the matter said.
NEWS
– Indonesia is targeting 12.5 million kilolitres consumption of unblended biodiesel made from palm oil this year, energy and mining minister Arifin Tasrif said on Monday.
– Oil prices edged up on Monday as traders watched for supply disruption risks in the Middle East, following strikes by U.S. and British forces to stop Houthi militia in Yemen from attacking ships in the Red Sea.
Source: Reuters (Reporting by Trixie Yap; Editing by Sonia Cheema)