Asia diesel margins hit two-month low on falling ICE gasoil futures
Asia's diesel refining margins fell to a two-month low as ICE gasoil futures declined nearly 3%. Cash premiums also hit three-month lows, but spot window activity increased.
SINGAPORE, Oct 6 (Reuters) — Asia's diesel markets were pressured by a nearly 3% decline in ICE gasoil futures, with margins slipping to a two-month low and cash premiums hitting three-month lows, though spot window liquidity turned brisk. Some end-October sales were done by northeast Asian refiners in discounted territory of $2 to $3 a barrel late last week, while India's MRPL also resumed its offers for end-October shipments. Traders were still awaiting more clues on November spot availability from northeast Asia given that some maintenance is expected to start in the coming weeks.
Separately, one southeast Asian refiner started selling November spot cargoes with discussions in the premiums territory. Refining margins extended losses further to around $62 a barrel, with Asian prices taking the cue from softer ICE gasoil futures ahead of next week's October contract expiry. A slew of window spot deals emerged for 10ppm sulphur gasoil, with trading major Vitol continuing its buy from the previous session. 15 a barrel at the market's close.
On the jet fuel front, traders remained slightly more bullish in comparison with diesel. More refiners are expected to continue focusing on diesel production ahead of the winter season — especially in the West — to cope with demand. Some buying interest is also expected to emerge from regional buyers for November cargoes soon. Regrade hovered at premiums of slightly more than $2 a barrel.
Singapore Cash Deals O/AS - Four gasoil deals, no jet fuel deal Inventories - US crude oil stockpiles were expected to have risen last week while product inventories are likely to have fallen, a preliminary Reuters poll showed on Monday. EIA/S News - Gulf oil flows excluding Iran surged to over 81% of pre-war levels in September, data showed, led by a recovery in Saudi exports despite attacks on the kingdom's oil infrastructure and escalating Iranian attacks on regional shipping, while Iranian exports fell to zero due to a US blockade.
- US President Donald Trump signed an executive order on Monday to expand access to tax-exempt diesel that he unveiled from a rally stage in Nebraska. - The squeeze on crude oil and refined fuels is set to tighten, and it could take up to two years to refill global stockpiles drawn on as an emergency measure, the chief executive of the world's biggest oil company Saudi Aramco said on Monday. - The energy system is more fragile today than earlier in the US-Israeli war, while the oil price floor gets gradually higher, Chevron CEO Mike Wirth said on Tuesday, as buffers for oil and fuel supply thin.
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