Asia Distillates: Gasoil premiums rise with sellers absent amid steady fundamentals

SINGAPORE: Asia’s spot cash premiums for 10 ppm sulphur gasoil spot cargoes extended gains for a sixth day on Wednesday, hitting 76 cents a barrel, with demand still strong for early July cargoes.

Sellers remained absent in the open market, but more cargoes emerged from South Korean refiners for July loading.

Refining margins for the transportation and industrial fuel rose to $16.91 a barrel amid little change in market fundamentals.

Traders were still mixed about the market’s July supply expectations as rumours of possible crude run cuts in northeast Asia emerged, although there was no confirmation.

Jet fuel refining margins climbed to $16.06 a barrel, narrowing the regrade to a discount of 85 cents. The export arbitrage window remains open for sellers to the US West Coast.

US crude oil and fuel inventories rose last week, while fuel inventories rose, according to market sources citing American Petroleum Institute figures on Tuesday. Crude stocks rose by about 1 million barrels in the week ended June 9, according to the sources, who spoke on condition of anonymity. Gasoline inventories rose by about 2.1 million, while distillate inventories gained by about 1.4 million.

Middle distillates stockpiles at Fujairah Oil Industry Zone fell by 787,000 barrels week-on-week to 3.568 million barrels for the week ended June 12, according to industry information service S&P Global Commodity Insights.

China has issued a third batch of 2023 crude oil import quotas, raising the total volume in the first half of this year to 194.1 million tonnes, up 20% from the same period last year, according to six people and documents on Wednesday.

The US Environmental Protection Agency is expected to release a final rule on biofuel blending volume mandates for the years 2023-2025 by June 21, after seeking a one-week extension on a deadline for the rule, according to a court document on Tuesday.

OPEC+ has granted Russia a slightly higher oil production baseline after the country agreed to work with several think-tanks and agencies to review its output figures, OPEC+ said on Tuesday. The Biden administration hopes to buy back at least 12 million barrels of oil for the Strategic Petroleum Reserve this year, including six million already announced, a source familiar with the matter said on Tuesday.

Shell said on Wednesday it is conducting a strategic review of energy and chemicals assets on Bukom and Jurong Island in Singapore.