SINGAPORE: Asia’s 10 ppm sulphur gasoil margins rebounded 4.4% day on day to $24.99 per barrel, almost erasing earlier week’s losses, as trading sentiment turned for the better amid a strong rebound in oil futures.
Cash differentials for 10 ppm sulphur gasoil went up to 75 cents per barrel as some traders continued their pursuit for end-March and April parcels.
Gains were capped after a portion of the market questioned the sustainability of a price rebound in the near-term amid persistently weak regional demand fundamentals.
Supply was readily available from northeast Asia, with a handful of South Korean refiners still offering April parcels and Indian refiners emerging to start their April discussions.
Jet fuel refining margins firmed as well to $22.32 per barrel.
Forward month regrade and prompt regrade values both narrowed to discount of $2.67 a barrel and $3.57 a barrel as some spread buyers came back in as they had expectations of the market already bottoming out.
The IEA still expects air travel demand to improve in its report on Wednesday. “Rebounding jet fuel use and a resurgent China will see an overall 1Q-4Q ramp-up of 3.2 million barrels per day (bpd), the largest relative in-year increase since 2010.”
US crude oil inventories rose last week, while fuel stockpiles fell, according to market sources citing American Petroleum Institute figures on Tuesday. Crude stocks rose by about 1.2 million barrels in the week ended March 10, they said. Gasoline inventories fell by about 4.6 million barrels, while distillate stocks fell by about 2.9 million barrels, according to the sources, who spoke on condition of anonymity.
Middle distillates stockpiles at Fujairah Oil Industry Zone hit a six-week high of 2.521 million barrels for the week ended March 13, according to industry information service S&P Global Commodity Insights.
Chinese refineries processed 3.3% more crude oil in the first two months of 2023 compared with a year earlier, data showed on Wednesday, spurred by fuel export policy and as independent refiners processed more in response to improving margins.
Saudi Arabia’s energy minister Prince Abdulaziz bin Salman told Energy Intelligence in an interview on Tuesday the OPEC+ alliance will stick until the end of the year to production cuts agreed in October.
Oil prices rebounded more than 1% on Wednesday, recovering from the previous day’s fall, after OPEC’s upwards revision for Chinese consumption offset bearish global investor sentiment trigged by US bank failures.
Some 42% of operators at TotalEnergies’ French refineries and depots were on strike Wednesday morning as a walkout over the government’s planned changes to its pension system continued for an eighth day, a company spokesperson said.
Kuwait has asked some Asian refiners to take less oil under their annual deals as the OPEC producer hopes to start full-scale operations at its Al Zour refinery later this year, three refining sources familiar with the matter said.
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