Asia Distillates: Thin market liquidity limits gasoil price fluctuations

SINGAPORE: Asia’s middle distillates market opened the week with limited market activity as some participants were away for a regional energy conference, while outlook for July-August was mixed.

Spot premiums for 10ppm sulphur gasoil firmed slightly to 96 cents a barrel, reflecting the stronger prompt swaps market, despite buyers and sellers in a stand-off amid the wide bid-offer gap.

“The net speculative long in ICE gasoil increased by 12,250 lots to 16,191 lots over the week. This was largely driven by short covering. The gross short declined by 10,319 lots over the period. Refinery outages have been supportive for middle distillates in recent weeks and if these outages continue, there is room for further short covering,” ING analysts said in a note.