Asia’s middle distillates markets saw an uptick in paper and physical discussions as ICE gasoil futures were little changed, with some refiners still clearing prompt cargo sales.
SK Energy still had spot sales ongoing for prompt end-July loading cargoes, leading traders to believe that the market was structurally still weak in terms of supply.
Alternatively the refiner could be looking to capitalise on getting better spot deals, given the possibility of traders shipping larger-sized cargoes out of Asia to west-of-Suez markets, one Singapore-based trade source said.
Meanwhile, the east-west arbitrage spreads remained shaky though a decline in freight costs this week could push some swing sellers in the Middle East and India to send their cargoes west instead.
Some discussions to charter Very Large Crude Carriers from east to west also fell through, possibly due to better freight costs on the smaller clean product vessels instead, one shipbroking source said.
This could mean the majority of Asia-origin cargoes could still stay within the region, further weighing on sentiment.
Spot cash discussions remained in discounts of more than 30 cents a barrel, following a widening contango price structure in the July-August paper markets.
Lower priced sellers were also readily available, weighing on overall spot market discussion levels.
Refining margins slipped for a second straight session to almost $17 a barrel, erasing earlier gains.
Source: Hellenic Shipping News
