Asia’s middle distillates markets were brimming with spot activity both on window and offscreen for July spot cargoes, against a backdrop of more supply disruptions in northeast Asia.
Sales via spot tenders these two days were being discussed at similar levels from a month ago, with one major selling at slight discounts of nearly 20 cents per barrel and one discussing at premiums, multiple trade sources said.
More unplanned outages in northeast Asia surfaced, contributing to further bullish trading sentiment, as a handful of refineries are still scheduled to go on maintenance in the next month.
Some shortcovering demand for both front-month June and first-half July has been emerging since late last week by two refiners affected by supply disruptions, with at least one cargo changing hands at slight premiums on a CFR basis.
Traders held on to their mixed views on jet fuel markets, given that lengthy supplies are still present ahead of the summer peak demand season despite some replenishment in regional demand over the past two weeks.
On the trading window, activity remained upbeat with Japanese oil major ENEOS emerging to seek end-June and early July cargoes for the first time in a long while.
Spot premiums (GO10-SIN-DIF) for 10ppm sulphur gasoil however, held steady at 46 cents per barrel despite the flurry of discussions.
Meanwhile, jet fuel cash markets came under pressure as timespreads turned into a wider contango and the arbitrage sales window between Asia and the U.S. West Coast stayed closed.
The 10ppm sulphur gasoil refining margins (GO10SGCKMc1) skidded back down to below $16 a barrel, reversing course from the previous trading session.
Regrade (JETREG10SGMc1) widened further to slightly more than $1.20 a barrel.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel deal.
INVENTORIES
– U.S. crude oil stockpiles fell last week as oil refiners ramped up production with the start of the summer driving season, while fuel inventories rose amid weaker demand, data from the Energy Information Administration showed on Wednesday.
– U.S. product supplied of distillate fuel oil, a measure of demand for diesel and heating oil, fell in the previous week to 3.15 million barrels per day (bpd), the lowest since April 2024, data from the Energy Information Administration showed on Wednesday.
– Singapore’s middle distillates stockpiles declined for a second straight week as net exports of diesel and jet fuel surged, though some surprise volumes from Indonesia were recorded, official data showed on Thursday.
REFINERY NEWS
– BP restarted a crude distillation unit at its Rotterdam oil refinery on the morning of June 4, having shut the 200,000-barrels-per-day (bpd) unit because of an unplanned outage the previous day, consultancy Wood Mackenzie said on Wednesday.
– PetroChina is set to close the last remaining crude unit at its biggest north China refinery at the end of this month, broadly in line with an earlier plan that marks the country’s first full closure of a state-run plant, four industry sources said.
– Japan’s biggest refiner, Eneos Corp, experienced an unplanned shutdown of the 77,000-barrels-per-day No.3 crude distillation unit at its Kawasaki refinery near Tokyo, starting June 4, a company spokesperson said on Thursday.
NEWS
– Saudi Arabia, the world’s biggest oil exporter, on Wednesday lowered its July prices for Asian buyers after OPEC+ hiked output for a fourth month, although the price cut was smaller than expected.
Source: Reuters