SINGAPORE: The uptrend in spot premiums for Asia 10 ppm sulphur gasoil paused after five sessions of gains as buying sentiment was shaken by the sustainability of firm oil futures, against a backdrop of unchanged demand fundamentals.
Buyers turned cautious on expectations of regional supply remaining long in the near term leading into August. Cash premiums closed the trading session lower by 4 cents day-on-day at 41 cents a barrel.
Some offers for free-on-board (FOB) Middle East cargoes did emerge after the market saw a selling hiatus the past six sessions. FOB Singapore sellers remained by the sidelines. Refining margins for the low sulphur fuel fell as well to around $15.43 a barrel.
Regrade was valued at almost a one-month high of minus 50 cents a barrel, with the market fuelled by strong demand expectations for jet fuel from the West and China ahead of the summer peak demand season.
Domestic flight numbers in China for May have exceeded 2019 figures, one source said.
Jet fuel refining margins fell at a slower pace to $14.43 a barrel.
US crude oil and product inventories were expected to rise last week, a preliminary Reuters poll showed on Monday. Analysts estimated stockpiles of gasoline rose by about 1.5 million barrels last week, while distillate , which includes diesel and heating oil, increased by about 2.2 million barrels.
Russia’s seaborne oil exports from Primorsk, Ust-Luga and Novorossiisk hit four-year record of 2.4 million barrels per day (bpd) in May as domestic refineries maintenance season freed up extra barrels, Refinitiv Eikon data showed on Monday. US crude oil exports, already running close to a record level hit in March, should get a further boost next month from deep production cuts in Saudi Arabia, analysts said on Monday, noting that this will also further deplete US crude inventories, which have been hovering near historic lows.
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