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Asia Distillates-Gasoil records muted trade; jet fuel surges

Asia’s 10ppm sulphur gasoil markets recorded limited change on thin trading liquidity both on a physical and swaps front, with traders waiting for a clearer supply outlook in the fourth quarter.

Refining margins GO10SGCKMc1 for 10ppm sulphur gasoil were little changed at slightly above $32 a barrel, given the limited activity in the swaps and futures markets, as some participants were clearing their positions at the end of the month.

Spot cash premiums GO10-SIN-DIF for the fuel fell 5 cents a barrel to reflect a lack of strong buying interest, though sellers were equally few.

Support primarily came from the stable cracks in the northwest Europe markets, as thin activity continued to be prevalent in the open market.

A portion of the market remained positive on supply tightness, given hefty production losses expected from India and the Middle East when the maintenance season starts in September.

However there was a lack on clarity on China export volumes in September since a fresh batch of quotas have yet to be announced.

Jet fuel refining margins JETSGCKMc1 rose slightly, hitting almost $31 a barrel, as summer demand continued to support the market.

“Our expectations for strong summer air travel have played out with strong fuel consumption helping to support fuel margins across the board, as Brent (prices) spent much of Q223 rangebound,” analysts from BMI research said in a client note.

However, BMI analysts expect price gains of the aviation fuel to pare back in the coming months as the demand boost from the northern hemisphere summer travel season wanes.

Regrade JETREG10SGMc1 narrowed to around $1.40 a barrel, reflecting the slightly stronger jet fuel performance.

SINGAPORE CASH DEALS O/AS

– No deals for gasoil or jet fuel.

INVENTORIES

– Distillate stockpiles USOILD=ECI in the U.S., which include diesel and heating oil, rose by 900,000 barrels to 116.7 million barrels, versus expectations for a 200,000-barrel rise, Energy Information Administration data showed on Wednesday.

– Singapore’s middle distillates stockpiles surged by more than 1 million barrels (134,222 metric tons) week on week and hit a 19-week high, as the impact of lower outflows of jet fuel/kerosene outweighed an increase in gasoil net exports, official data showed on Thursday.

REFINERY OUTAGE REF/OUT

– Both crude distillation units were shut at TotalEnergies 238,000 barrel-per-day (bpd) Port Arthur, Texas refinery on Wednesday, said people familiar with plant operations.

– Japan’s Cosmo Oil, a unit of Cosmo Energy Holdings Co Ltd 5021.T, shut down the 100,000 barrels-per-day (bpd) crude distillation unit (CDU) at its Sakai refinery on Aug. 18 for planned maintenance, a company spokesperson said on Thursday.

– Japan’s biggest refiner Eneos Corp said on Thursday the crude distillation units (CDUs) at its Mizushima refinery in the western part of the country are operating normally after a fire the previous day.

NEWS

– India’s diesel exports to Singapore are set to hit a 19-month high in August and exceed 330,000 metric tons, boosted by cheaper freight costs and low inventories in the Asian oil hub, traders and analysts said.

– The third phase of China’s largest single coastal oil storage facility has been completed and went into operation on Wednesday in Qingdao port, in the eastern province of Shandong, the state media outlet China News reported.

– Oil prices eased on Thursday amid disappointing economic data from key economies and as investors await a speech by U.S. Federal Reserve Chair Jerome Powell on Friday for clueson interest rates.
Source: Reuters (Reporting by Trixie Yap)

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