Asia’s middle distillates markets saw more December discussions during the week, though cautiousness on demand remained prevalent and prices trended sideways, with offers for next year’s term cargoes also available.
For diesel, offers for December gradually emerged from the region’s several key refiners in line with earlier expectations, with spot discussions picking up slightly.
Uncertainty on demand, however, stayed a key driver, with only Vietnam’s Petrolimex seeking early December cargoes this week and Indonesia’s Pertamina still buying end-November.
The latter has so far bought around 1.7 million barrels for November delivery, one trade source said, adding there is no further clarity on their December requirements yet.
Supplies are likely to rise in December, after maintenance in South Korea end and some refiners consider ramping up production, so demand has to come up to soak up all the increments, a second source said.
Jet fuel markets were mostly on a decline through the week, as some China majors are likely to have sufficient export quotas for the refueling of flights on international routes in the next two months.
Sufficient arrivals into Singapore for November weighed on the market, with spot premiums easing back to a three-week low of 43 cents a barrel.
However, an opened arbitrage between Asia and the U.S. west coast was supportive for the market through the week.
Refining margins for 10ppm sulphur gasoil declined by almost $1 a barrel week on week to slightly below $15 a barrel.
Cash differentials for the fuel fell to below $1 a barrel, reflecting the ongoing lower-priced offers and limited buying interest in the open trading window.
Regrade closed the week at 92 cents a barrel, climbing 12 cents week on week.
SINGAPORE CASH DEALS
– No gasoil deal, one jet fuel deal.
INVENTORIES
– Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by 2.4% in the week to Thursday, data from Dutch consultancy Insights Global showed.
REFINERY NEWS
– Cenovus’ 183,000 barrel-per-day refinery in Lima, Ohio issued a notice to the nearby community of “strong odors” as a result of an issue with one of the units at the plant, the company said in an emailed statement.
Source: Reuters (Reporting by Trixie Yap; Editing by Shreya Biswas)
