SINGAPORE: Asia’s 10 ppm sulphur gasoil margins and jet fuel cracks fell again, hitting a new low since more than a year ago, on the back of a narrower east-west arbitrage spread and overall thin buying interest regionally.
The prompt month EFS spread, a differential between Asian gasoil paper swaps and ICE gasoil futures, fell to the lowest in the week at a discount of less than $38 a tonne. Supplies remained sufficient, with May volumes likely to remain steady from north and southeast Asian refiners and discussions are likely to start next week, a few traders said.
Decreases were capped by expectations of preliminary lower export volume estimates from China for April - around 500,000 tonnes, from data compiled by consultancies Refinitiv Oil Research and Longzhong.
Cash differentials were supported by prompt mid-April shortcovering demand in the open trading market, although some participants were sceptical if this represented organic demand.
Regrade recouped some earlier losses and closed the trading session at a discount of around $3.85 per barrel.
US crude oil stockpiles fell unexpectedly last week as refineries restarted operations after maintenance and imports fell to a two-year low, the Energy Information Administration said on Wednesday. Distillate stockpiles, which include diesel and heating oil, rose by 300,000 barrels in the week to 116.7 million barrels, versus expectations for a 1.5 million-barrel drop, the EIA data showed.
Inventories of middle distillates at key trading hub Singapore climbed further by 2.3% week on week despite an increase in total net export volumes, official data showed on Thursday.
Privately controlled Zhejiang Petrochemical Corp (ZPC), operator of China’s largest refinery, said on Thursday it has reached a strategic agreement with state refining giant Sinopec on the domestic marketing of its fuel. Under a deal reached earlier this week, Sinopec will handle more than 60% of ZPC’s domestic refined products sales, worth about 55 billion yuan ($8.0 billion) a year, the company said in a statement posted on its WeChat account.
PetroChina’s, net profit jumped 62.1% to a record high last year as stronger energy prices more than offset weak demand for fuel and chemicals, China’s largest oil and gas producer said on Wednesday.