SINGAPORE: Liquidity picked up for gasoil in Singapore on Monday with 1.69 million barrels changing hands, the highest volume of deals in the past few months, trade sources said.
They said Petrodiamond sold a 10ppm sulphur diesel cargo for Nov. 8 to 12 loading to Trafigura in a rare move for the oil trading company, which does not often do deals in the Platts' window.
The company has oil storage at the Vopak terminal in Singapore and is expected to expand its trading in the region, after buying assets in Australia, one of the traders said.
Spot demand from South Africa and Tanzania also supported gasoil, traders said.
But next month, refineries in the United States and Asia are expected to return from the bulk of their maintenance season boosting supplies of middle distillates globally, traders said.
"There is going to be more 10ppm sulphur diesel coming into the market once these refineries are back, so I think the premium will become even weaker," a Singapore-based trader said.
Many are hoping for a cold winter in Europe to pull more Asian barrels to the west, he added.
India's Reliance Industries sold a November-loading 500ppm sulphur gasoil cargo at a premium of about 50 cents a barrel above Middle East quotes, industry sources said.
This is the first time in several months that the Indian refiner has sold the 500ppm sulphur gasoil grade instead of the 10ppm sulphur diesel grade, one of them said, likely indicating sluggish demand for the ultra low sulphur diesel.
Japan's Cosmo Oil Co said on Monday it would mothball one of two crude distillation units (CDUs) at its Yokkaichi refinery in central Japan to meet part of the requirements of a government directive.
Under the rule, Cosmo will also raise the capacity of other CDUs at its Chiba and Yokkaichi refineries.
The second round of directives from the Ministry of Economy, Trade and Industry calls on Japanese refiners to increase the ratio of residue cracking units to crude distillation units (CDUs) by the end of March 2017, helping to raise the percentage output of high-value products like diesel and jet fuel.
Egyptian General Petroleum Corp (EGPC) has bought 8 cargoes of 0.1 percent sulphur content gasoil for November delivery, traders said.
Three cargoes were awarded to Vitol, three to Glencore while BB Energy and Sahara were each awarded one cargo, the sources said.
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