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Asia Distillates-Markets little changed, paper activity still burgeoning

Asia’s middle distillates markets continued to record little change, despite paper markets brimming with spot activity amid a roll-over in discussion months and slightly bullish June analyst outlooks in the market.

Expectations of thinner supplies in June due to lower refinery runs will likely ease earlier supply gluts and be supportive of the market, some analysts say.

“(The) very early indications of reductions in South Korean and Chinese diesel exports as we transition into June. These developments collectively paint a bullish outlook for Singapore diesel in the short to medium term. The amount of extra AG/WCI diesel arbs that actually move East will be important to monitor here,” said Sparta Commodities analysts in a client note.

Meanwhile, possible production hiccups emerged in South Korea, with one refiner’s atmospheric desulphurisation unit having issues, though further details could not be confirmed.

Spot market premiums GO10-SIN-DIF declined further given the lower-priced sellers readily available in the spot market for June parcels, against a backdrop of thin buying interest.

Sellers have mostly outnumbered buyers in the past three trading sessions this week.

Refining margins remained little changed from the previous trading session.

On the jet fuel front, the market turned slightly quiet as traders were still awaiting offers from a handful of northeast Asian sellers for June shipment.

China’s oil majors were also not fully in action yet, one source said.

Regrade held steady at a discount of around $1.50 a barrel.

SINGAPORE CASH DEALS

– No gasoil deal, one jet fuel deal.

INVENTORIES

– U.S. crude oil, gasoline and distillate inventories fell last week, both refining activity and fuel demand rose, the Energy Information Administration (EIA) said on Wednesday.

– Singapore’s middle distillates stocks slid to a nearly three-month low this week, falling below 11 million barrels for the first time in a month as gains in jet fuel/kerosene net exports offset declines in diesel/gasoil net exports, government data showed on Thursday.

NEWS

– Russia’s seaborne oil product exports in April fell 14.6% from the previous month to 8.415 million metric tons due to seasonal and unplanned maintenance at refineries and a fuel export ban, data from industry sources and Reuters calculations showed.

– Indonesia expects investments in its oil and gas sector to rise 29% in 2024, the chairman of regulator SKK Migas told Reuters, as it races to ramp up drilling and exploration following the recent exits of global giants Shell SHEL.L and Chevron CVX.N.

– Binh Son Refining and Petrochemical BSR.HNO has chosen HSBC Bank as the export credit agency for a project to expand its Dung Quat refinery, the Vietnamese company said on Thursday.
Source: Reuters (Reporting by Trixie Yap; Editing by Shweta Agarwal)

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