Asia’s middle distillates markets remained thinly discussed on the spot front as January negotiations were yet to go into full swing, with traders keeping a close eye on China export availability and demand in the West.
Supply movements will hinge on demand expectations from the West, with some traders already expecting swing cargoes to pivot West once the market there picks up.
Focus was also on China’s announcement on export quotas for next year, with some traders already closing their trading programmes for this year.
On spot sales front, refiner offers were scant for a second straight session, though January discussions are expected to begin soon from northeast Asia.
Term negotiations continued, with Petrolimex closing its tender to buy two cargoes of 10ppm sulphur gasoil and one cargo of 500ppm sulphur gasoil per month for January-December delivery. Offers need to be valid until Dec. 15.
Meanwhile, the arbitrage price spread for jet fuel between Asia and the U.S. west coast remained open, with traders still expecting flows on this route to continue for December.
Refining margins slipped further for a second straight week, closing at around $14.4 a barrel on Friday.
Cash differentials declined slightly to a premium of 35 cents a barrel, as lower-priced offers for prompt loading cargoes stayed prevalent.
Regrade dipped by almost 40 cents week-on-week to close at around 33 cents a barrel on Friday, though some traders were still bearish on the jet fuel market fundamentals.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– Gasoil stocks, which include diesel and heating, fell by 5.5% on the week to 2.13 million tons due to higher exports from ARA to northwest Europe and the Baltics.
Source: Reuters (Reporting by Trixie Yap; Editing by Varun H K)
