SINGAPORE: Asia’s 10 ppm sulphur gasoil margins opened the week firmer on the back of volatile oil futures and thin market liquidity on Wednesday as some participants were still away for the holidays.
The market was also playing catch-up with firmer cracks in the West over the Asian holidays, according to one trader.
Refining margins for 10 ppm sulphur gasoil closed the trading session at $38.89 a barrel, up by almost $3 a barrel from the previous close.
Cash differentials on the other hand were being traded at $2.72 a barrel, with gains capped by some available offers in the market for mid-February parcels.
Buying interest was scant and only from one China refiner.
Jet fuel refining margins surged to $38.04 a barrel, widening the regrade value to a discount of 85 cents a barrel.
US crude oil and gasoline inventories rose last week, while distillate stockpiles fell, according to market sources, citing American Petroleum Institute figures on Tuesday. Crude stocks rose by about 3.4 million barrels in the week ended Jan. 20, they said.
Gasoline inventories rose by about 620,000 barrels, while distillate stocks fell by about 1.9 million barrels, according to the sources, who spoke on condition of anonymity.
Middle distillate stocks at Fujairah Oil Industry Zone fell to 2.987 million barrels for the week ended Jan. 23, according to industry information service S&P Global Commodity Insights.
Oil prices slipped on Wednesday, adding to a decline in the previous session, as a rise in US crude inventories and global recession worries edged out optimism for a demand recovery in China.
A failure at a reformer in Venezuela’s Cardon refinery, a key unit for making gasoline, means the unit will be out of service for about 25 days, four workers at the facility said on Tuesday.
An OPEC+ panel is likely to endorse the producer group’s current oil output policy when it meets next week, five OPEC+ sources said on Tuesday, as hopes of higher Chinese demand driving an oil price rally are balanced by worries over inflation and a global economic slowdown.