Asia Distillates-Thin window activity persists; diesel east-west spread stays narrow

Reuters
16 Jul
Asia Distillates-Thin window activity persists; diesel east-west spread stays narrow

SINGAPORE, July 16 (Reuters) - Asia's middle distillates markets remained thinly discussed on the trading window as traders mulled August supply balances amid a shaky east-west price spread.

August spot sales slowed slightly, but some traders said some discussions could be done privately, contributing to the lack of overall sale tenders.

Sentiment turned slightly cautious as traders were skeptical on how much the Europe region can take in from swing suppliers for July, given that almost all export volumes could be headed there.

Swing supply flows could turn back to Asia to seek comfort by the end of this month, two trade sources said, adding on to regional supply balances.

The east-west spread for August LGOAEFSMc1 remained narrower than a discount of $40 per ton in the past three trading sessions, with some traders deeming this number to possibly be more profitable for sellers to send cargoes east instead of west.

On the trading window, deals for 10ppm sulphur gasoil were absent for a third straight trading session. Cash differentials GO10-SIN-DIF edged down to $1.37 a barrel, reflecting the weaker paper market structure.

Meanwhile, refining margins for 10ppm sulphur gasoil GO10SGCKMc1 closed the trading session slightly firmer at around $20.3 a barrel.

For jet fuel, cargo flows on the east-west route are still likely to materalise given the length in regional supplies and open arbitrage windows.

However, regrade JETREG10SGMc1 widened back to discounts of slightly more than $1.9 a barrel.

SINGAPORE CASH DEALS O/AS

- No deals for both fuels

INVENTORIES

- Middle distillates stocks held at Fujairah Oil Industry Zone gained to a two-week high of 2.593 million barrels in the week ended July 14, according to industry information service S&P Global Commodity Insights.

REFINERY NEWS REF/OUT

- Repairs were continuing on Tuesday to a diesel-producing hydrocracker at Marathon Petroleum's MPC.N 631,000-barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, people familiar with plant operations said.

NEWS

- OPEC said the global economy may perform better than expected in the second half of the year despite trade conflicts and that refineries’ crude intake would remain elevated to meet the uptick in summer travel, helping to support the demand outlook.

- Indonesia, Southeast Asia's largest economy, has committed to purchasing 50 Boeing BA.N jets, $15 billion in U.S. energy and $4.5 billion in U.S. agricultural products as part of its trade agreement with the U.S., Trump said.

- Lower prices for oil and liquefied natural gas will weigh on French oil major TotalEnergies' second-quarter earnings, even as its hydrocarbon production rose slightly, it said in a trading update on Wednesday.

PRICES

MIDDLE DISTILLATES

CASH ($/BBL)

ASIA CLOSE

Change

Prev Close

RIC

Spot Gas Oil 0.5%

83.21

0.12

83.09

GO-SIN

GO 0.5 Diff

-5.24

-0.04

-5.20

GO-SIN-DIF

Spot Gas Oil 0.25%

87.41

-1.88

89.29

GO25-SIN

GO 0.25 Diff

-1.04

-0.04

-1.00

GO25-SIN-DIF

Spot Gas Oil 0.05%

88.33

0.45

87.87

GO005-SIN

GO 0.05 Diff

-0.12

0.30

-0.42

GO005-SIN-DIF

Spot Gas Oil 0.001%

89.82

0.12

89.70

GO10-SIN

GO 0.001 Diff

1.37

-0.04

1.41

GO10-SIN-DIF

Spot Jet/Kero

86.47

0.17

86.30

JET-SIN

Jet/Kero Diff

0.11

0.02

0.09

JET-SIN-DIF

For a list of derivatives prices, including margins, please double click the RICs below.

Brent M1

BRENTSGMc1

Gasoil M1

GOSGSWMc1

Gasoil M1/M2

GOSGSPDMc1

Gasoil M2

GOSGSWMc2

Regrade M1

JETREGSGMc1

Regrade M2

JETREGSGMc2

Jet M1

JETSGSWMc1

Jet M1/M2

JETSGSPDMc1

Jet M2

JETSGSWMc2

Gasoil 500ppm-Dubai Cracks M1

GOSGCKMc1

Gasoil 500ppm-Dubai Cracks M2

GOSGCKMc2

Jet Cracks M1

JETSGCKMc1

Jet Cracks M2

JETSGCKMc2

East-West M1

LGOAEFSMc1

East-West M2

LGOAEFSMc2

LGO M1

LGOAMc1

LGO M1/M2

LGOASPDMc1

LGO M2

LGOAMc2

Crack LGO-Brent M1

LGOACKMc1

Crack LGO-Brent M2

LGOACKMc2

(Reporting by Trixie Yap; Editing by Sahal Muhammed)

((trixie.yap@thomsonreuters.com;))

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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