Asia’s diesel markets stayed soft, with timespreads weakening for a second straight session this week, though window spot trading activity did pick up slightly on Thursday.
Diesel exports from China are expected to stay lower in September compared with August given squeezed margins, with analysts expecting volumes at around 500,000 metric tons or slightly more.
Refining margins (GO10SGCKMc1) dipped further to close at $15.9 a barrel, its lowest level since early June.
Deals for 10ppm sulphur gasoil spot cargoes stayed scant on the trading window, with cash differentials (GO10-SIN-DIF) slipping in line with the weaker swap market structure to close at a premium of 61 cents per barrel.
For jet fuel, some traders were cautious-to-bearish on regional jet fuel fundamentals, given the influx of supplies from China still expected for September with industry estimates at around 2.4 million tons.
However, official offers were still lacking from China-based refiners, confusing a portion of the market, two trade sources said.
So far only two of China’s refiners have sold or were selling September spot cargoes in these two weeks, Reuters tender records showed.
On the arbitrage front, the Asia-U.S. west coast price spread remained profitable for sellers to consider sending jet fuel on this trade route, with spreads at around $5 per barrel after considering freight costs.
Regrade (JETREG10SGMc1) widened slightly to discounts of around $1.7 a barrel.
SINGAPORE CASH DEALS
– No gasoil deal, one jet fuel deal
INVENTORIES
– U.S. crude stocks, gasoline, and distillate inventories fell last week as demand rose, the Energy Information Administration said on Wednesday.
REFINERY NEWS
– Mexico’s 340,000-barrel-per-day Dos Bocas refinery has been offline since Monday due to a power outage at the plant, two sources familiar with the matter told Reuters.
– BP’s BP.L 440,000-barrel-per-day refinery in Whiting, Indiana, is back to operating at normal rates after taking multiple units offline due to a severe thunderstorm last week, industry monitor IIR said on Wednesday.
NEWS
– Crude oil shipments via the Druzhba pipeline from Russia to Hungary could resume on Thursday in test mode at lower volumes, Hungarian Foreign Minister Peter Szijjarto said in a post on X on Wednesday.
– Russian energy company Novatek’s NVTK repairs to damage caused by a fire at its complex in the Baltic port of Ust-Luga are likely to take several months, four market sources said on Thursday.
– Saudi Arabia, the world’s biggest oil exporter, may cut October crude oil prices for Asian buyers amid ample supply and weaker demand, refining sources said.
– Oil fell on Thursday after rising in the previous session, pressured by expectations of lower U.S. fuel demand with the end of the summer travel season and by the restart of Russian supply to Hungary and Slovakia through the Druzhba pipeline.
Source: Reuters
