Asia Distillates-Paper markets turn active, cash discounts steepen

Asia’s middle distillates markets recorded a flurry of paper market activity for July, buoying overall refining margins, though physical discussions in the open market were in a wide buy-sell gap and prices were little changed overall.
Talks of more dirty tankers switching to clean product loadings continued to be prominent in the spot market, with at least two more supertankers in the process of being cleaned up, several trade sources said.
Refining margins for the fuel closed the trading session at around $16.80 a barrel, clawing back the early week losses.
Spot market premiums fell by 2 cents as a result of the widening contango between July and August spot prices.
In the jet fuel markets, discussions were thin in the open trading window despite the myriad of offers as buyers were absent amid cautious regional demand outlooks.
Regrade widened to a discount of $1.55 a barrel as a reflection of the stronger performance in the gasoil markets.
SINGAPORE CASH DEALS
– No deals for both fuels
INVENTORIES
– U.S. crude oil and gasoline inventories rose last week while distillates fell, according to market sources citing American Petroleum Institute figures on Tuesday.
– Middle distillates stocks at Fujairah Oil Industry Zone fell for a third straight week to a three-month low of 2.58 million barrels for the week ended June 24, according to industry information service S&P Global Commodity Insights.
NEWS
– Russian oil producer Lukoil has restarted a key piece of equipment for oil processing at its NORSI refinery, Russia’s fourth-largest, following a drone attack in March, two industry sources told Reuters on Wednesday.
– Mexican state energy company Pemex upped the volume of crude oil it exported in May, following a substantial dip a month earlier, and returned to levels closer to its monthly average, official data showed.
– ExxonMobil may need to suspend production at its Gravenchon refinery in northern France if striking workers continue to block access to the site, the oil major said on Tuesday.
– Three executives at oil trader Coral Energy have bought out the company after acquiring the founder’s remaining 40% stake in the firm, according to a source familiar with the matter and documents seen by Reuters on Tuesday.
Source: Reuters (Reporting by Trixie Yap; Editing by Mrigank Dhaniwala)