Asia Distillates-Margins back at 18-month lows; CPC seeks Oct jet fuel

Asia’s middle distillates markets saw thin activity in the open trading window on Monday given some regional holidays and weakness in ICE gasoil futures, despite more jet fuel buying activities in northeast Asia.

On the spot refiner sales front in northeast Asia, SK Energy has sold up to 1.2 million barrels of 10ppm sulphur gasoil cargoes for October, while GS Caltex is offering 600,000 barrels, Reuters records showed.

Traders were also awaiting further supply directions from China, as export quotas did not emerge ahead of a regional holiday there.
Refining margins for 10ppm sulphur gasoil slipped back to 18-month lows of around $11.6 a barrel, reflecting the persistent weakness in derivative markets and strength in crude prices.

However, spot market discounts regained some ground and bounced back to slightly below 50 cents a barrel, reflecting the narrower October-November swap price structure.

Meanwhile, demand for October cargoes from some regional importers supported jet fuel markets, with several refinery maintenance likely to cap supplies slightly as well.

However for prices to firm further, more demand will be needed to prop up the market’s balance, one source said.

Regrade closed the trading session firmer at a discount of 15 cents per barrel.

SINGAPORE CASH DEALS

– No gasoil deal, one jet fuel deal.

NEWS

– Indonesia’s President-elect Prabowo Subianto plans to launch a green economy fund by selling carbon emission credits from projects such as rainforest preservation, aiming to raise $65 billion by 2028, an adviser told Reuters.
– Marine fuel sales at Singapore, the world’s largest bunker hub, posted a 2.3% monthly decline in August due to softer demand for key conventional fuel grades, data showed on Monday, although marine biofuel sales reached a monthly record high.
– China’s oil refinery output in August fell 6.2% from a year earlier, official data showed on Saturday, declining for the fifth month as disappointing fuel demand and weak export margins curbed production.
– A Nigerian presidential committee announced on Friday that state-owned oil company NNPC Limited will distribute gasoline from the 650,000 barrels-per-day Dangote Refinery to the local market, ending the deadlock that had stalled distribution.
Source: Reuters (Reporting by Trixie Yap; Editing by Varun H K)