SINGAPORE: Asia’s regrade spread, the differential between 10 ppm gasoil and jet fuel cracks, pared the entire week’s losses and posted a weekly rise on Friday, with buying continuing for a third consecutive day.
A portion of the market still believed the regrade to have been overly traded earlier in the week after it widened to a four-month low discount of $4.45 per barrel.
Gasoil demand fundamentals are technically still weaker than jet fuel because of the limited arbitrage opportunities, one northeast Asian refinery source said, even though jet fuel discounts are higher for physical cargoes.
On the cracks front, Asia’s 10 ppm sulphur gasoil and jet fuel margins posted small declines of 2%-4% on the week as buying sentiment recovered, offsetting the early-week downtrend. Refining margins for 10 ppm gasoil closed the week at $23.78 per barrel, while jet fuel refining margins were at $20.78 per barrel.
Cash differentials for 10 ppm sulphur gasoil rose for a third consecutive day with at least two aggressive buyers in the market seeking April parcels, against a backdrop of few competitively-priced offers.
The arbitrage spread on paper for April between Asia and northwest Europe narrowed to a discount of $43.68 a barrel after talks of delivery resuming at some French refineries amid strike action.
Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage area fell for the fourth week in a row, data from Dutch consultancy Insights Global showed on Thursday. Gasoil stockpiles fell on healthy demand, said Insights Global’s Lars van Wageningen.
Oil prices extended losses on Friday on worries about a potential oversupply after US Energy Secretary Jennifer Granholm said refilling the country’s Strategic Petroleum Reserve (SPR) may take several years.
Fuel shipments resumed early Friday from TotalEnergies Gonfreville refinery in Normandy after police intervened to disperse refinery workers holding a blockage, Energy Minister Agnes Pannier-Runacher said on Friday.’
State oil giant Abu Dhabi National Oil Co (ADNOC) plans to float its marine and logistics subsidiary in the coming months, two sources said, the second initial public offering of one of its businesses this year.