Asian middle distillates extended gains on Thursday, as US crude futures kept within range of $64 a barrel, with fresh data on heavy Singapore stocks pushing jet-kerosene into a deeper contango.
The cash session recorded one trade, with lone bidder Hin Leong taking up an offer from Chevron for 150,000 barrels of 0.5 percent sulphur diesel at plus 5 cents a barrel to spot quotes for April 13-17 loading. The price was akin to the most recent deal on Tuesday.
Jet-kerosene's best bid at a discount of $1 a barrel to spot quotes was untouched despite the lowest offer at minus 75 cents, matching the bid/offer levels in the previous trading session.
April regrade, or the spread between jet-kerosene and gas oil, weakened to $1.55 a barrel from $1.75 a day ago as a perennial set of high volumes of aviation fuel stocks weighed on the market. "Most of their kerosene flow to Singapore tanks, hence the heavy levels," said a refinery source, referring to hefty Japanese exports.
A mild winter had forced Japan to export a huge 1.27 million tonnes of middle distillates from February to mid-March at cheap prices, with the bulk dumped in Singapore. Middle distillate inventories in the oil hub rose 169,000 barrels in the week ended Wednesday to a seven-month high of 8.669 million barrels.
The situation was compounded by swing Middle East suppliers diverting jet fuel cargoes to Asia as shipment opportunities to Northwest Europe were curbed by rising supplies there.
Jet fuel stocks in the Amsterdam-Rotterdam-Antwerp area rose last week to 383,000 tonnes from 375,000 tonnes a week earlier, leading to deeper discount levels in the European spot market at minus $10 a tonne for mid-April loading from minus $4. Reflecting the bearish market, jet-kerosene's April/May swaps spread slipped into a deeper discount of $1.30 a barrel from minus $1.10 a day ago.
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