SINGAPORE: Asia’s re-grade, also known as the discount between jet fuel and 10 ppm sulphur gasoil, widened to a three-week high as traders sold off.
The sell-off was attributed to some participants believing that spreads were wider than expected, despite a seasonal peak for kero demand in the winter and lower export volume expectations from China in January.
Japanese buyers snapped up two spot lots from South Korea mid-week at higher-than-expected premiums.
Refining margins for 10 ppm sulphur gasoil rose to $33.73 a barrel, while jet fuel refining margins fell to $31.33 a barrel. Cash differentials for 10 ppm sulphur gasoil, however, fell to $1.90 a barrel.
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US crude stocks built up unexpectedly last week, the Energy Information Administration said, as refiners were slow to restore production after a cold freeze that shut operations. Crude inventories rose by 19 million barrels in the week ended Jan. 6 to 439.6 million barrels.
Analysts polled by Reuters had expected a 2.2 million-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 1.1 million barrels in the week to 117.7 million barrels, versus expectations for a 0.5 million-barrel drop, the EIA data showed.
Singapore’s middle distillates stocks held by up to 14 major oil and oil storage companies, as of Jan. 11, climbed to a more than 3-month high at 8.36 million barrels, according to data released on Thursday by Enterprise Singapore.
ExxonMobil on Wednesday said it had reached an agreement with Bangchak Corporation to sell all of its shares of Esso Thailand.
The sale includes the Sriracha oil refinery, select distribution terminals, and a network of Esso-branded retail fuel stations. The transaction is expected to close in the second half of 2023.
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