SINGAPORE, Jan 16 (Reuters) -

Asia's middle distillates physical markets turned quiet on the trading window on Thursday, as cash premiums gained to a two-month high on a wider paper market backwardation, though refiners were sealing February deals at mixed floating prices.

Spot 10ppm sulphur gasoil sale discussion levels quietly slipped back into the slightly discounted territory, as markets remained cautious on the improvement in supply-demand fundamentals even up to March.

Major traders are expecting minimal direct impact on diesel regional supplies as a result of the sanctions on Russian barrels in the near term - though from a cost front it could turn positive.

Some sellers are trying to swing supplies to the west this week starting February, but India-origin barrels are still heading here in the next two weeks for now, one trade source said.

Asia is still slated to take up the largest proportion of India-origin exports for January loading as of now, shiptracking data from LSEG and Kpler showed.

On the jet fuel front, traders are expecting more volumes to head to South Africa for January, with at least two Middle East-origin cargoes already destined there following local supply disruptions by oil major Sasol.

Refining margins closed the trading session little changed at around $16.50 a barrel.

Cash differentials clawed back earlier losses and rebounded back to three-month highs as the paper market backwardation went back to more than $1 a barrel.

Regrade gained slightly to a discount of around $1.7 a barrel.

SINGAPORE CASH DEALS

- No deals for both fuels

INVENTORIES

- U.S. crude oil stocks excluding the Strategic Petroleum Reserve $(SPR)$ fell last week to their lowest since April 2022 as exports rose and imports fell, the Energy Information Administration $(EIA)$ said on Wednesday.

- Singapore's middle distillates stockpiles gained for the first time in a month to slightly above 9 million barrels and net exports of diesel/gasoil and jet fuel/kerosene both dipped, official government data showed on Thursday.

NEWS

- Spot premiums for Middle East crude rose to their highest in more than two years as strong demand from top importers China and India to replace sanction-hit supplies from Russia and Iran drove up prices, traders said on Thursday.

- Oil prices steadied on Thursday a day after settling at multi-month highs on the latest U.S. sanctions on Russia and a larger-than-forecast fall in U.S. crude stocks.

- Nearly 500,000 metric tons of Russian oil products are trapped on tankers hit by U.S. sanctions, LSEG data showed on Wednesday.

- BP announced on Thursday that it will cut around 4,700 staff, or over 5% of its total workforce, as part of CEO Murray Auchincloss' efforts to reduce costs.

PRICES

MIDDLE DISTILLATES

CASH ($/BBL) ASIA CLOSE Change Prev Close RIC

Spot Gas Oil 0.5% 93.48 1.90 91.58

GO 0.5 Diff -5.12 0.08 -5.20

Spot Gas Oil 0.25% 98.91 1.90 97.01

GO 0.25 Diff 0.31 0.08 0.23

Spot Gas Oil 0.05% 99.15 1.90 97.25

GO 0.05 Diff 0.55 0.08 0.47

Spot Gas Oil 0.001% 99.71 1.99 97.72

GO 0.001 Diff 1.11 0.17 0.94

Spot Jet/Kero 97.32 1.92 95.40

Jet/Kero Diff 0.68 0.09 0.59

For a list of derivatives prices, including

margins, please double click the RICs below.

Brent M1

Gasoil M1

Gasoil M1/M2

Gasoil M2

Regrade M1

Regrade M2

Jet M1

Jet M1/M2

Jet M2

Gasoil 500ppm-Dubai

Cracks M1

Gasoil 500ppm-Dubai

Cracks M2

Jet Cracks M1

Jet Cracks M2

East-West M1

East-West M2

LGO M1

LGO M1/M2

LGO M2

Crack LGO-Brent M1

Crack LGO-Brent M2

(Reporting by Trixie Yap; Editing by Krishna Chandra Eluri)

((trixie.yap@thomsonreuters.com;))