Asia’s diesel margins surged to two-year highs despite slightly thinner spot activity on the trading window and a weaker market structure, with supply-demand fundamentals staying tight for front months.

Support mainly came from regional supply disruptions, which some traders expect to last for the next 2-3 weeks, and firm prices in the West.

Talks of limited export volumes from China next month provided further upside to the market, with estimates at less than 300,000 metric tons for now as local majors find methods to settle.

Off window, more spot offers for December cargoes surfaced, with major South Korean exporter GS Caltex offering.

However some caution on the market’s upside remained, with some traders still expecting price movements to be volatile given a mix of bullish paper trading sentiment.

Refining margins closed the trading session at two-year highs of slightly more than $28 a barrel.

Cash differentials fell slightly to around $3 a barrel, in line with the easing spot market structure and much thinner discussions on the trading window amid a persistent lack of physical offers.

Regrade values were little changed at discounts of 60-70 cents per barrel.

SINGAPORE CASH DEALS

– No deals for gasoil and jet fuel

INVENTORIES

– U.S. crude oil stockpiles were expected to have risen last week, while gasoline and distillate inventories likely fell, a preliminary Reuters poll showed on Tuesday.

NEWS

– Saudi Arabia is expected to export at least 36 million barrels of crude oil to China in December, slightly less than the previous month, several sources with knowledge of the matter said on Wednesday.

– Global oil and gas demand could grow until 2050, the International Energy Agency said on Wednesday, departing from its previous expectations of a speedy transition to cleaner fuels and predicting that the world will likely fail to achieve climate goals.
– Oil prices softened on Wednesday but held onto most of their gains fromthe previous session amid expectations that an end to the longest-ever U.S. government shutdown could boost demand in the world’s biggest crude-consuming nation.
Source: Reuters