Asia Gasoil/Jet

17 Mar, 2007

Asian middle distillates ended the week lower, in tandem with US crude futures, but diesel losses were capped in view of stronger physical purchases that supported the front-month April swaps.
The cash session saw four deals, of which Hin Leong bought three cargoes of 0.5 percent sulphur diesel at between parity and 10 cents a barrel premium. The prices were up from previous deals at discount levels of 20 and 30 cents, signalling a firmer market.
A jet fuel cargo changed hands between seller Vitol and buyer Shell at minus 60 cents to spot quotes for early April loading. The new front-month April diesel swaps spread to May narrowed to a discount of 5 cents a barrel from minus 35 cents a day ago, pushed up by firmer demand.
Vietnam's Petrolimex bought 101,000 tonnes of mid-sulphur diesel for April delivery, and planned to buy an extra cargo amid robust demand from industrial, agricultural and transportation sectors. Smaller rival importer Petechim resumed imports of diesel for April, buying 15,000 tonnes for delivery early next month after skipping imports in March.
While prompt regional supplies were plenty, traders said the levels would ease when the peak maintenance season kicks off next month. April regrade, or the spread between jet-kerosene and gas oil, weakened 50 cents from Thursday to $1.70 a barrel, on ample supplies amid a closed arbitrage to ship cargoes to the US West Coast.

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