Gasoil cash premiums rebound on strong Feb demand

Asia's 10-ppm sulphur gasoil cash premiums rebounded on Wednesday, as firm buying interest from a China major remained for mid-February parcels.

Cash differentials (GO10-SIN-DIF) for 10 ppm sulphur gasoil were valued at $2.95 a barrel.

March and April cargoes were being snapped up under private discussions as well by the same buyer, with some participants believing there could be location swap demand present for arbitrage trade.

Exact details, however, could not be ascertained.

This was amid much lower stock levels in the United States and Fujairah.

However, refining margins (GO10SGCKMc1) for 10 ppm sulphur gasoil declined for the fifth consecutive trading session to around $31 a barrel, amid upstream stronger oil futures performance.

Jet fuel refining margins (JETSGCKMc1) likewise trended lower and at a faster pace to $30.32 a barrel, resulting in narrower regrade (JETREG10SGMc1) values at a discount of 70 cents.

The market came under slight pressure after continuous selling interest emerged over the past two weeks for prompt February loading jet fuel from northeast Asia refiners.

SINGAPORE CASH DEALS

- One gasoil deal, no jet fuel deal.

INVENTORIES

- U.S. crude oil and fuel inventories rose last week, according to market sources, citing American Petroleum Institute figures on Tuesday. Crude stocks rose by about 6.3 million barrels in the week ended Jan. 27, they said. Gasoline inventories rose by about 2.7 million barrels, while distillate stocks rose by about 1.5 million barrels, according to the sources, who spoke on condition of anonymity.

- Stocks of middle distillates at Fujairah Oil Industry Zone hit an eight-month low at 2.333 million barrels for the week ended Jan. 30, according to industry information service S&P Global Commodity Insights.

NEWS

- China's factory activity shrank more slowly in January than in the previous month thanks to the end of the country's zero-COVID policy, though infections among workers still hampered production, a private sector survey showed on Wednesday.

- Russia's exports of ultra-low sulphur diesel (ULSD) from the Baltic Sea port of Primorsk are set to rise by 4.6% month-on-month on a daily basis in February to 1.71 million tonnes, from 1.81 million tonnes scheduled for January, two traders said on Wednesday.

- Russian oil product exports from the Black Sea port of Tuapse in February are set to rise by 8.8% month-on-month on a daily basis to 1.310 million tonnes, versus 1.333 million tonnes scheduled for January, two traders said on Wednesday.

- Oil prices were broadly stable as the market is looking towards a meeting of OPEC and its allies as well as a Federal Reserve rate decision and U.S. government data on crude and fuel stockpiles on Wednesday.

PRICES