SINGAPORE: Asia’s regrade spread, the differential between jet fuel and 10ppm gasoil, snapped a week of losses and rebounded to a discount just shy of $4 a barrel on some buying interest amid sufficient gasoil stock expectations for April.
The widening spreads have encouraged buyers to come back into the market, following earlier talks that refiners may consider switching production to gasoil instead of jet fuel given the better cracks.
Separately, cracks for 10-ppm sulphur gasoil continued to post losses for a third consecutive session to $23.92 per barrel.
Cash premiums firmed only slightly to $1.03 per barrel amid a buy-sell gap.
Losses in jet fuel refining margins slowed down and closed the trading session at $19.97 per barrel.
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 3.3 million barrels in the week ended March 17, they said. Gasoline inventories fell by about 1.1 million barrels, while distillate stocks fell by about 1.8 million barrels, according to the sources, who spoke on condition of anonymity.
Middle distillate stockpiles at Fujairah Oil Industry Zone rose to a one-month high for the week ended March 20, according to industry information service S&P Global Commodity Insights.
In the oldest refining town in the American West, Phillips 66 is promising a greener future as it moves to halt crude-oil processing and build a massive renewable diesel plant, leading a global trend.
Oil slipped in Asian trade on Wednesday, after two straight days of gains, as an industry report showed US crude inventories rose unexpectedly last week in a sign demand may be weakening.
A plunge in Brent crude prices has narrowed the spread between Atlantic Basin and Middle East benchmarks but has failed to spur interest from Asian refiners, which are instead buying up discounted Russian oil, leaving an overhang in African supply.—Reuters
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