Asia Distillates-Markets remain quiet, regrade nears 5-yr high
Asia’s middle distillates markets continued to record a second consecutive session of thin spot trading this week, against a backdrop of almost steady crude futures and overall limited physical buy-sell activity.
Market players are less keen to take fresh positions nearing the end of the year, two sources said.
Refining margins for the transport and industrial fuel remained slightly above $23 a barrel.
The discount in cash differentials deepened again as the December-January swaps spread narrowed, but a buy-sell gap hampered deals and firm discussions. Most sellers were offering at premiums whereas buyers were in discounts.
Regrade widened for the second consecutive trading session to a discount of 85 cents a barrel, reflecting the strength in Asian jet fuel swaps.
The arbitrage window for Asian exports to the U.S. West Coast remained open, though fresh shipping fixtures have yet to emerge.
SINGAPORE CASH DEALS
– No deals for both fuels
– U.S. crude stockpiles were expected to have fallen last week, while distillate and gasoline inventories likely rose, a preliminary Reuters poll showed on Monday.
REFINERY NEWS REF/OUT
– Large flames and black smoke emerged from the four smoke stacks of Chevron’s CVX.N Richmond, California refinery, triggered by a power loss at a portion of the facility, the company said.
– Oil prices rose on Tuesday, snapping a multi-session losing streak ahead of a crucial meeting of OPEC+, which is widely expected to deepen and extend cuts to oil production amid fears of supply being consistently higher than demand.
– China’s central bank governor said on Tuesday that monetary policy will remain accommodative to support the economy, but he urged structural reforms over time to reduce a reliance on infrastructure and property for growth.
Source: Reuters (Reporting by Trixie Yap; Editing by Krishna Chandra Eluri)