Asia Distillates-Cash diffs firm further amid wider east-west price gap

Reuters
14 Feb
Asia Distillates-Cash diffs firm further amid wider east-west price gap

SINGAPORE, Feb 14 (Reuters) - Asia's middle distillates markets were volatile through the week though it turned quiet on Friday, with traders focusing on March refiner spot sale discussion levels amid a wider east-west price spread and stronger refining margins week on week.

Traders were monitoring the wider east-west arbitrage price spreads - around $30 per ton in the afternoon trading session for March - to see if higher Europe prices will egg swing suppliers to send more cargoes there starting March. 0#GO10SGEFS:

However, inventories are still high in Europe so it remains unclear how much demand can soak up these supplies next month, one Singapore-based trade source cautioned.

Cheaper freight costs via the Suez canal route could also push sellers to look west for demand outlets, which could help cut the supply length in Asia, a second source said.

On Friday, the 10ppm sulphur gasoil refining margins GO10SGCKMc1 gave back some of previous session gains, though they were overall still higher by nearly $1 from last week.

Meanwhile, in cash markets, spot differentials GO10-SIN-DIF climbed for the fourth straight session to almost 30 cents per barrel, reversing most of the losses over the past two weeks given the robust March buying interest.

Offers also turned scant for March cargoes on the trading window though, further supporting the gains.

Jet fuel markets were supported by an opened arbitrage window between Asia and the U.S. west coast, with traders saying some production hiccups there are causing tighter supplies.

Enquiries in the shipping markets for jet fuel flowing on this route were gaining momentum since mid this week, one shipbroking source said, though fixtures have yet to be firmed up.

Jet fuel spot market premiums JET-SIN-DIF also gained for a fourth straight session, though trades were thin and levels were still weaker week on week.

Ample spot supplies from China which are likely to be on offer soon, according to some trade sources, capped overall market firmness for the aviation fuel.

Regrade JETREG10SGMc1 discounts were wider week on week at 90 cents per barrel, though the spreads narrowed from the previous trading session.

SINGAPORE CASH DEALS O/AS

- No deals for both fuel

INVENTORIES

- Gasoil stocks were little changed at 2.57 million tons as inland demand and imports from the Middle East remained steady, Wageningen said. ARA/

REFINERY NEWS REF/OUT

- Independent U.S. refiner PBF Energy PBF.N said it has no estimate for how long its 156,400-barrel-per-day (bpd) Martinez, California, refinery will remain shut following a fire on February 1, according to a statement released on Thursday.

NEWS

- Oil prices rose on Friday, poised to end three weeks of decline, buoyed by rising fuel demand and expectations that U.S. plans for global reciprocal tariffs would not come into effect until April, giving more time to avoid a trade war. O/R

- Russia's oil exports could be sustained if it finds workarounds to the latest U.S. sanctions package, the International Energy Agency $(IEA)$ said on Thursday, as it forecast that growth in global oil supply would outpace demand this year.

- Tightened U.S. sanctions on Moscow have disrupted a roaring trade in discounted Russian oil to China and India, reviving demand for Middle Eastern and African crudes, roiling shipping markets and driving up oil prices.

PRICES

MIDDLE DISTILLATES

CASH ($/BBL)

ASIA CLOSE

Change

Prev Close

RIC

Spot Gas Oil 0.5%

86.77

0.39

86.38

GO-SIN

GO 0.5 Diff

-5.35

0.02

-5.37

GO-SIN-DIF

Spot Gas Oil 0.25%

91.54

0.39

91.15

GO25-SIN

GO 0.25 Diff

-0.58

0.02

-0.60

GO25-SIN-DIF

Spot Gas Oil 0.05%

91.10

0.39

90.71

GO005-SIN

GO 0.05 Diff

-1.02

0.02

-1.04

GO005-SIN-DIF

Spot Gas Oil 0.001%

92.41

0.44

91.97

GO10-SIN

GO 0.001 Diff

0.29

0.07

0.22

GO10-SIN-DIF

Spot Jet/Kero

92.22

0.46

91.77

JET-SIN

Jet/Kero Diff

0.85

0.03

0.82

JET-SIN-DIF

For a list of derivatives prices, including margins, please double click the RICs below.

Brent M1

BRENTSGMc1

Gasoil M1

GOSGSWMc1

Gasoil M1/M2

GOSGSPDMc1

Gasoil M2

GOSGSWMc2

Regrade M1

JETREGSGMc1

Regrade M2

JETREGSGMc2

Jet M1

JETSGSWMc1

Jet M1/M2

JETSGSPDMc1

Jet M2

JETSGSWMc2

Gasoil 500ppm-Dubai Cracks M1

GOSGCKMc1

Gasoil 500ppm-Dubai Cracks M2

GOSGCKMc2

Jet Cracks M1

JETSGCKMc1

Jet Cracks M2

JETSGCKMc2

East-West M1

LGOAEFSMc1

East-West M2

LGOAEFSMc2

LGO M1

LGOAMc1

LGO M1/M2

LGOASPDMc1

LGO M2

LGOAMc2

Crack LGO-Brent M1

LGOACKMc1

Crack LGO-Brent M2

LGOACKMc2

(Reporting by Trixie Yap; Editing by Shailesh Kuber)

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

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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