Asia’s middle distillates market remained weighed on by a closed east-west arbitrage window, for gasoil specifically, weakening ICE gasoil futures and uncertainties over the Russian ban amid limited regional demand-supply cues.
Refining margins GO10SGCKMc1 slipped again for the fourth straight session to slightly below $26 a barrel.
The narrower east-west arbitrage was “largely attributed to a softening on the European side thanks to the accumulation of stocks in ARA, currently at their highest level in over a month”, said Sparta Commodities analyst James Noel-Beswick.
The east-west arbitrage, typically measured by the exchanges of futures for swaps (EFS), was at a one-month low discount of $60 a ton after narrowing for five consecutive sessions.
The market’s backwardation structure narrowed to less than $3 a barrel given the clearing of October positions in the swaps market.
Spot premiums GO10-SIN-DIF also fell to almost a one-month low of around $1.97 a barrel, reflecting the lower prompt prices in the market.
Jet fuel refining margins JETSGCKMc1 declined at a slower pace than gasoil for a second consecutive session, despite a lack of activity, as an opened arbitrage to the U.S. West Coast remains a positive market driver.
Source: Hellenic Shipping News
