Asia Distillates-S. Korea refiners continue Sept sales; jet fuel remains bullish
SINGAPORE, Aug 23 (Reuters) -Asia's middle distillates markets recorded upbeat spot trading activity for September despite price and margins weakness week on week, while some bullish demand-supply outlooks did emerge for September and October.
A myriad of spot deals were done through the week by a handful of South Korea-based oil majors for September, as they sold up to 14 cargoes of 10ppm gasoil cargoes till now.
Meanwhile, several cargoes from India and the Middle East were seemingly bound for Brazil again for August loading, with this trade route gaining some traction ahead of maintenance in Russia and also better profit margins for east-west arbitrage flows, traders and analysts said.
This could in turn alleviate the persistent supply glut within Asia in the near-term and provide a floor to both margins and prices soon.
At least 350,000 tons of diesel will likely head from India and the Middle East for Brazil for August loading, data from Vortexa, Kpler and one trading source showed.
Refining margins GO10SGCKMc1 for the fuel fell around $1.40 from a week earlier to close the trading week at $14.30 a barrel.
Cash differentials GO10-SIN-DIF were little changed from the previous trading session but a lack of active buying interest in the window capped spot activity for September.
For jet fuel, prompt month support from the west this week propelled the paper swaps market into a backwardated structure, with September prices propped up mostly as traders try their best to send cargoes west.
Regrade JETREG10SGMc1 took a breather from gains the past three trading sessions and closed at a discount of 40 cents a barrel. The discount still however halved from a week earlier on stronger demand expectations, holding strong at more than two-month highs.
Spot cash markets flipped to a premium for the aviation fuel for the first time since two months ago, reflecting the strong open market buying interest for September cargoes.
SINGAPORE CASH DEALS O/AS
- No deals for both fuels
INVENTORIES
- Independently held refined oil products stocks in storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose by 3.2% in the week to Thursday, driven by higher middle distillate stocks, data from Dutch consultancy Insights Global showed. ARA/
NEWS
- Chinese biofuel company Zhejiang Jiaao 603822.SS has signed an investment deal with BP BP.L on sustainable aviation fuel, the company said in a statement on its WeChat account late Thursday.
- Oil prices were little changed on Friday but on track to end the week lower, as weaker U.S. employment data raised concerns over demand, and renewed ceasefire talks in Gaza eased worries about supply disruptions. O/R
- Owners of Philippine Tank Storage International are seeking to bring a strategic investor into the company that runs the biggest petroleum products import storage facility in the country, two people with knowledge of the matter said.
- Malaysian state energy firm Petronas is in talks with sellers to buy Middle East crude loading in October for its joint-venture refinery with Saudi Aramco as the plant ramps up output, trade sources said on Friday.
PRICES
MIDDLE DISTILLATES | ||||
CASH ($/BBL) | ASIA CLOSE | Change | Prev Close | RIC |
Spot Gas Oil 0.5% | 84.18 | 1.67 | 82.51 | GO-SIN |
GO 0.5 Diff | -6.44 | 0.00 | -6.44 | GO-SIN-DIF |
Spot Gas Oil 0.25% | 89.22 | 1.67 | 87.55 | GO25-SIN |
GO 0.25 Diff | -1.41 | 0.00 | -1.41 | GO25-SIN-DIF |
Spot Gas Oil 0.05% | 88.75 | 1.67 | 87.08 | GO005-SIN |
GO 0.05 Diff | -1.87 | 0.00 | -1.87 | GO005-SIN-DIF |
Spot Gas Oil 0.001% | 90.39 | 1.66 | 88.73 | GO10-SIN |
GO 0.001 Diff | -0.23 | -0.01 | -0.22 | GO10-SIN-DIF |
Spot Jet/Kero | 90.40 | 1.63 | 88.77 | JET-SIN |
Jet/Kero Diff | 0.13 | 0.31 | -0.18 | JET-SIN-DIF |
For a list of derivatives prices, including margins, please double click the RICs below. | ||||
Brent M1 | BRENTSGMc1 | |||
Gasoil M1 | GOSGSWMc1 | |||
Gasoil M1/M2 | GOSGSPDMc1 | |||
Gasoil M2 | GOSGSWMc2 | |||
Regrade M1 | JETREGSGMc1 | |||
Regrade M2 | JETREGSGMc2 | |||
Jet M1 | JETSGSWMc1 | |||
Jet M1/M2 | JETSGSPDMc1 | |||
Jet M2 | JETSGSWMc2 | |||
Gasoil 500ppm-Dubai Cracks M1 | GOSGCKMc1 | |||
Gasoil 500ppm-Dubai Cracks M2 | GOSGCKMc2 | |||
Jet Cracks M1 | JETSGCKMc1 | |||
Jet Cracks M2 | JETSGCKMc2 | |||
East-West M1 | LGOAEFSMc1 | |||
East-West M2 | LGOAEFSMc2 | |||
LGO M1 | LGOAMc1 | |||
LGO M1/M2 | LGOASPDMc1 | |||
LGO M2 | LGOAMc2 | |||
Crack LGO-Brent M1 | LGOACKMc1 | |||
Crack LGO-Brent M2 | LGOACKMc2 | |||
Reporting by Trixie Yap; Editing by Shreya Biswas
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