Asia Distillates: Gasoil margins halt gains; cash premiums firm on demand

SINGAPORE: Asia’s 10 ppm sulphur gasoil margins fell after two days of gains, as a handful of market players started to become sceptical of the sustainability of the earlier uptrend.

Talks of slightly tightening regional supply for May and June, especially from South Korea because of the maintenance season, capped weakness and supported the cash premiums discussion levels in the open market.

Cash differentials firmed to a discount of 8 cents from a discount of 21 cents because of open bids in the market for both early and mid June cargoes.

Overnight strength in the US market following more plant troubles could have also encouraged buying, one trader said.

Refining margins for 10 ppm sulphur gasoil cargoes were at $16.63 a barrel, down around 25 cents day on day. Jet fuel refining margins, however, gained further ground to $15.56 a barrel, with regrade narrowing back to a discount of $1.07 a barrel.

Gasoil margins were surging faster than jet fuel since yesterday, widening the regrade between the two products, one producer said.

Middle distillates stocks at key storage hub Singapore were steady as a jump in net exports for jet fuel/kerosene offset weaker net gasoil exports, with Saudi gasoil imports emerging for the first time in 2023, official data showed on Thursday.

US commercial crude oil stockpiles jumped unexpectedly last week due to another release from the Strategic Petroleum Reserve, while gasoline inventories dropped as demand surged to its highest since 2021, the Energy Information Administration said on Wednesday. Distillate stockpiles, which include diesel and heating oil, rose by 0.1 million barrels in the week to 106.2 million barrels, versus expectations for a 100,000 barrel rise, the EIA data showed.

Oil prices eased on Thursday as traders warily watched for signs of progress on talks to raise the US debt ceiling, after surging in the previous session on optimism over US fuel demand.

Saudi Arabian oil giant Aramco on Thursday named Nasir al-Naimi and Mohammed Al Qahtani as presidents of its upstream and downstream businesses, respectively, in a move designed to support the company’s growth plans.

Two cargoes of diesel sailing from Russia to South America have switched their destination to Brazil from Chile, according to Refinitiv Eikon’s vessel monitoring data.