SINGAPORE: Cash and swap differentials of benchmark 500ppm gasoil strengthened on Friday, driven by the view that supply will temporarily tighten, traders said.
"The market is holding off pretty well and we're seeing that sentiment is continuing to strengthen in the market," said one Singapore-trader.
The impending refinery turnaround season is expected to ease pressure from abundant supplies amid high refinery run rates and sluggish demand growth, traders said.
The maintenance season, coupled with "very low crude margins in Northwest Europe, along the North American East Coast and to some extent also in the Med are increasing the chances that some refiners will curb crude runs which in return raises the likelihood of some counterbalancing via increased secondary feedstock purchases," said JBC Energy in its daily market report on Friday.
"With European turnaround levels expected to hit a year-to-date high of almost 900,000 barrels per day in April, chances are improving that the combined effects of some run cuts in March, followed by the aforementioned maintenance, will temporarily tighten middle distillate markets and provide the fundamentals needed to also force a rebound in VGO cracks," said JBC Energy.
Inventories of jet fuel in the Amsterdam-Rotterdam-Antwerp (ARA) hub fell 6 percent on slowing imports from other regions, consultancy PJK International said on Thursday.
Meanwhile, gasoil inventories were little changed, said PJK.
In the United States, weekly distillate stockpiles , which include diesel and heating oil, rose by 2.9 million barrels to 163.6 million barrels in the week to Feb. 26, compared with expectations for a 1.2 million-barrel drop, EIA data showed. The total was its highest level seasonally since 2011.
Refinery crude runs rose by 167,000 barrels per day, EIA data showed. Refinery utilisation rates rose by 1 percentage point.
SINGAPORE CASH DEALS: Four deals reported.
Sietco bought 100,000 barrels of jet fuel from Petrochina for March 22-26 loading $44.30 a barrel.
Petrochina bought 150,000 barrels of 500ppm gasoil from Total for March 22-26 loading at a discount of 40 cents a barrel to Singapore quotes.
Trafigura bought 150,000 barrels of 500ppm gasoil from BP for March 19-23 loading at a discount of 10 cents a barrel to Singapore quotes.
Petrochina bought 150,000 barrels of 500ppm gasoil from Total for March 19-23 loading at a discount of 20 cents a barrel to Singapore quotes.
Comments
Comments are closed for this article.