Asia’s middle distillates trading activity slowed and spot deals on trading window thinned, though the backwardation in diesel paper markets stayed robust and weighed on regrade price spreads.

Diesel derivative markets went back into a deeper backwardated price structure, as some traders remained upbeat on front-month market performance. The October exchange of futures for swaps (EFS) spread narrowed by around $2 per ton from the previous trading session as a result.

On refiner sales, more China-origin spot barrels for both diesel and jet fuel were available on offer for October shipment, in line with earlier expectations, as sellers start clearing their usual sales requirement.

Spot offers from remaining northeast Asian refiners were scant as most had completed their sales in the past two weeks, mostly in discounted territory for cargoes loading in second-half October.

Refining margins (GO10SGCKMc1) climbed for a third straight session, strengthening to two-month high levels of $20.5 a barrel.

There were no sellers for physical 10ppm gasoil cargoes for Singapore markets, but buying interest firmed as the market structure went further into backwardation.

The 10ppm sulphur gasoil cash differentials (GO10-SIN-DIF) climbed back to one-week highs of 96 cents per barrel.

Regrade (JETREG10SGMc1) gave back all of previous sessions’ gains, declining back to Monday’s discount level of $1.25 a barrel.

SINGAPORE CASH DEALS

– No deals for jet fuel or gasoil

REFINERY NEWS

– Primary oil processing at Russia’s Novokuibyshevsk refinery, which is operated by the Rosneft oil company, has been halted since September 20 following a Ukrainian drone attack, two industry sources said.

INVENTORIES

– U.S. crude and fuel inventories fell last week amid an uptick in demand, the Energy Information Administration said on Wednesday.
– Singapore’s middle distillates stock levels slipped for a second straight week on rising diesel net exports, despite robust jet fuel imports from China, official government data showed on Thursday.

NEWS

– Indian oil refiners are increasing gasoline and diesel exports to their highest levels in several years, driven by expanded crude processing capacity and increased domestic ethanol blending that has freed up fuel supplies for overseas markets, traders and analysts said.
– New Zealand’s government said it had opened applications for new oil and gas exploration permits on Thursday, after reversing a 2018 ban on new exploration for fossil fuels.
– A Ukrainian drone strike on the southern Russian port city of Novorossiisk killed two people and wounded six on Wednesday, regional authorities said on Telegram.
Source: Reuters