Asia’s middle distillates markets gave back past few sessions of gains, with margins backing down by almost $1 a barrel, tracking weakness in the futures market as thin liquidity emerged.

The market remains cautious about July supply expectations, with most traders expecting offers to emerge in the next few days from key refiners, with some still planning their refinery production plans.

Refining margins closed the trading session slightly below $14 a barrel.

Cash differentials barely moved as the paper contango structure was little changed, and physical cargo activity remained muted for the third straight session this week.

A buy-sell gap continued to contribute to a lack of physical deals.

Jet fuel market activity was thin but some China refiners were still discussing their June spot export volumes.

Regrade widened slightly to discounts of $1.34 a barrel.

SINGAPORE CASH DEALS

– No deals for both fuels.

INVENTORIES

– Singapore’s middle distillates inventories fell by more than 100,000 barrels in the week ended May 29 amid higher net jet fuel/kerosene exports, though diesel/gasoil net exports declined, official data showed on Thursday.

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

NEWS

– Oil prices were broadly steady as pressure from U.S. data pointing to higher-for-longer rates was offset by inventory numbers showing strong demand for crude in the United States.

– Mexico plans to resume oil shipments to Cuba after a three-month pause, shipping data showed on Wednesday, a move that could help ease power outages and worsening fuel scarcity on the island.

– The global shift to renewables in major energy-consuming sectors slowed in 2023, hindered by regulatory gaps, political pressures and a failure to set clear targets, a policy group said on Wednesday.
Source: Reuters (Reporting by Trixie Yap)