Asia’s middle distillates refining margins firmed to a more than three-month high of above $26 a barrel, reflecting the support from ICE gasoil futures, despite cautious buy-sell interest in the physical markets.
There could be a bout of shortcovering demand in the futures market in the prompt months and some rollover in trading positions to March that is supporting the futures market as well, one source said.
Markets still awaited fresh buy-sell tender activities from regional players, though the emergence of March sale tenders from the Middle East came unexpected as it was still early.
Earlier worries about slightly tightening regional supplies eased slightly after major refiner SK Energy announced that there would be minimal maintenance plans at its Ulsan or Incheon refineries in the first quarter this year during an earnings briefing.
Regional freight costs for northeast and southeast Asia routes slipped for the first time, mitigating some prevailing concerns that this could eat into March seller discounts.
Spot market premiums for second-half February to early March loading cargoes were little changed as a buy-sell gap remained a key hindrance. Physical deals were absent from the trading window for a second straight session, though some lower-priced selling interest did emerge from a key trader.
Jet fuel refining margins likewise gained slightly more than 7% from the previous trading session.
Traders were awaiting more offers to emerge soon from northeast Asian refiners for March-loading cargoes.
Regrade widened slightly to a discount of more than $2.70 a barrel, as a reflection of the mostly unchanged market fundamentals.
Source: Hellenic Shipping News
