Asia Distillates-Jet fuel activity takes a breather; Vitol buys more diesel on window

Asia’s middle distillates markets remained heavily discussed both on the spot front and window front, though jet fuel activity did simmer down slightly after regrade breached a fresh high in the previous session.

November paper discussions were aplenty, likewise for November/December swap activity.

On the physical trading window, western trading major Vitol continued its shopping spree for November 10ppm sulphur gasoil spot cargoes, despite a hiatus in the past week.

Jet fuel offers for swing supplies in the Middle East, and India were gradually emerging, especially for November, given the profitability for selling to east of Suez markets instead of the west.

There are expectations for some northeast Asian refiners to switch yields to more jet fuel instead of diesel soon, given the price strength in the former.

There is a slight price disparity in the market for the different grades of jet fuel, given that demand in the West requires higher flash points, one source said, adding that this could contribute to a wide price discussion range.

A handful of traders are expecting the bullishness to gradually slow down for December when sellers finally manage to redirect their cargoes here.

Refining margins for 10ppm sulphur gasoil climbed to $14.67 a barrel, supported by strong prompt buying activity in the swaps market at the month-end.

The 10ppm sulphur gasoil cash premiums continued its upward trajectory to close at $, a reflection of steeper backwardation in Nov-Dec swaps and strong buying interest.

Meanwhile, regrade gave back all gains from the previous session and declined to around $1.50 a barrel, as gasoil prompt markets showed a stronger performance.

SINGAPORE CASH DEALS

– One gasoil deal, no jet fuel deal

INVENTORIES

– U.S. crude oil and gasoline stockpiles likely rose last week, while distillate inventories were seen down, a preliminary Reuters poll showed on Monday.

NEWS

– A tanker carrying about 400,000 barrels of oil departed from Mexico’s Pajaritos port and was on Monday en route to Cuba, where an acute energy crisis has left the island struggling to keep the lights on, shipping data showed

– Ghana could buy petroleum products from Nigeria’s Dangote Oil Refinery once the facility is operating at full capacity, cutting more expensive exports from Europe, the head of the country’s oil regulator said on Monday.

– Asia’s largest oil and gas producer PetroChina Co Ltd reported a 5.3% year-on-year decline in third-quarter net profit as weaker fuel sales and lower oil prices outweighed growing gas and oil output.

– Saudi Arabia is “committed” to maintaining crude capacity at 12.3 million barrels per day, Energy Minister Prince Abulaziz bin Salman said on Tuesday.
Source: Reuters (Reporting by Trixie Yap: Editing by Tasim Zahid)