SINGAPORE: Asia’s 10 ppm sulphur gasoil cash premiums fell on cautious trading sentiment, despite a bout of strong buying interest in the afternoon open market trading session.
Weakness in cash differentials for 10 ppm sulphur gasoil was cushioned by strong buying interest for February from one Chinese major.
Refining margins weakened on a sell-off, reflecting the continuously poor demand-supply fundamentals regionally to $35 a barrel.
Several traders believed the market was overvalued in comparison with other regions such as Europe, given the sufficient supply from northeast Asia for February.
High stock levels at Singapore’s onshore ports further supported these views.
Weakness in jet fuel refining margins was cushioned by stronger performance in the United States on travel demand recovery, despite a lack of physical trade and discussions. Regrade narrowed to a discount of 60 cents a barrel as a result.
US crude inventories rose last week as demand for fuels tapered off, and while the increase was less than expected, crude stocks reached the highest level since June 2021, the Energy Information Administration (EIA) said on Wednesday.
Though distillates demand fell by 146,000 barrels per day, distillates stockpiles, which include diesel and heating oil, were down by 0.5 million to 115.3 million barrels, EIA data showed.
Singapore middle distillates stocks climbed to a more than 9-month high of 8.708 million barrels as of Jan. 25, according to data released on Thursday by Enterprise Singapore.
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