SINGAPORE: The Asian gasoil differentials held steady on Tuesday, but demand was firm in the region, with supply expected to be curbed due to refinery maintenance in Asia and the Middle East, traders said.
With the gasoil market flipping into backwardation, when prices for cargoes loading in the prompt month are higher than those for cargoes loading later, storing has become less attractive, traders said.
Prices of long-range sized vessels have also risen from the lows of two weeks ago, so storing the oil in vessels is no longer attractive, one of them said.
"People were looking at it a while ago when (tanker) rates were low but they've seen them come up and gasoil is backwardated, so it makes less sense now," the trader added.
Ceylon Petroleum Corp bought a combination cargo of 120,000 barrels of 500ppm sulphur gasoil and 192,000 barrels of jet fuel from PetroChina Singapore, sources said.
The cargo is for delivery from Nov. 13 to 14. Ceypetco will pay a premium of $1.75 a barrel to Singapore quotes for the gasoil barrels and a premium of 97 cents a barrel for the jet fuel barrels, one of them said.
India's Mangalore Refinery and Petrochemicals Ltd sold 40,000 tonnes of jet fuel for Nov. 25 to 27 loading, industry sources said.
The cargo was sold to Vitol at a discount of about $1.10 a barrel to Singapore quotes, one of them said.
This is higher than the discount of $1.20 to $1.30 a barrel MRPL achieved for a Nov. 13 to 15 loading cargo sold to BP earlier, the sources said.
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