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Asia Distillates-Indian refiners seek more diesel, boost margins

Spot demand from India continued to support profit margins for diesel in Singapore, trade sources said. But an expected rise in exports of the fuel from China capped gains.

– INDIA DIESEL: India’s Hindustan Petroleum Corp Ltd (HPCL) is seeking three cargoes of 65,000 tonnes each for delivery in July, a tender document showed. The tender closes on June 21 and is valid until June 22. India’s stepped-up imports of diesel this year, compared with previous years, have been supporting Asian gasoil margins and absorbing the glut of cargoes in Asia, traders said. India’s HPCL-Mittal Energy Ltd (HMEL), part-owned by HPCL, has delayed the start-up of its Bathinda refinery in northern Punjab state by a fortnight to the end of this month, an industry source has said, likely prompting the refiner to seek extra diesel cargoes in July.

– NEW HYDROCRACKER: PetroChina said it plans to build a new hydrocracking unit that can produce 150,000 tonnes of kerosene per year at its Golmud refinery in western Qinghai province, the company said on Monday. The new refining unit will be completed by October. – TANZANIA TENDER: Tanzania’s Petroleum Bulk Procurement Agency is seeking 199,600 tonnes of 50ppm sulphur gasoil and 22,080 tonnes of jet fuel and kerosene for delivery in August, tender documents showed. The tender closes on June 29 with offers to remain valid for 15 days.

– CHINA RETAIL PRICES: Chinese state oil giants Sinopec and PetroChina are waging war at the nation’s gas pumps, slashing prices at unprecedented rates in an effort to reclaim sales lost to private local and foreign rivals in the $440 billion retail fuel market. The rare price war kicked off in late March as Sinopec reported first quarter retail sales had slid to a three-year low. Spurred by a glut of fuel, Sinopec started offering hefty discounts in response to ad-hoc but frequent promotions by independent petrol station operators. This could in turn push up exports of diesel from the country, traders said. “The (price war) could be due to reduction in the export quotas,” a North Asian trader said. The Chinese government had curbed the quota for exporting oil products, which in turn led to a build-up in stocks of refined fuels. JBC Energy estimates that about 520,000 barrels per day (bpd) of refining capacity is expected to be added in the second half of this year, which will add to the oil products surplus.

– SINGAPORE CASH DEALS: One gasoil deal and one jet fuel trade.

MID-DISTILLATES CASH ($/T) ASIA CLOSE Change % Change Prev

RIC Close Spot Gas Oil 0.5% 56.67 0.00 0.00 56.67 GO 0.5 Diff -0.50 0.00 0.00 -0.50

Spot Gas Oil 0.25% 56.87 0.00 0.00 56.87 GO 0.25 Diff -0.30 0.00 0.00 -0.30

Spot Gas Oil 0.05% 57.38 0.00 0.00 57.38 GO 0.05 Diff 0.21 0.00 0.00 0.21

Spot Gas Oil 0.001% 58.22 0.00 0.00 58.22 GO 0.001 Diff 1.05 0.00 0.00 1.05

Spot Jet/Kero 56.71 0.00 0.00 56.71 Jet/Kero Diff 0.01 0.01 N/A 0.00

Source: Reuters (Reporting by Jessica Jaganathan; Editing by Sunil Nair)

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