Asia’s diesel markets extended decline on Wednesday, with both cash differentials and timespreads weakening from the previous session, although January spot refiner selling remained brisk.

A handful of South Korean refiners still sought to clear their regular sale requirements for January.

However, regional tenders to procure January imports remained scarce.

Some traders were also eyeing January spot sale activity from China’s oil majors, with a lack of direction on next year’s export quota allowance still evident.

East-west price spreads were little changed at discounts of slightly more than $30 per metric ton, while freight costs for shipping 90,000 tons of refined fuels on the Middle East-northwest Europe route were at $44 per ton.

Refining margins eased further to three-month lows, closing at $19.7 a barrel.

Mirroring the downtrend in paper markets, cash differentials (GO10-SIN-DIF) fell to 45 cents per barrel, near six-month lows, but some firm prompt buying interest limited the decline.

The jet fuel arbitrage export window to the U.S. West Coast from Asia remained shut, though some traders were hoping firmer demand from northwest European markets to soon be supportive for swing suppliers to send their cargoes there.

Regrade held steady at premiums of 30-40 cents per barrel.

SINGAPORE CASH DEALS

– One gasoil deal, no jet fuel deal

INVENTORIES

– U.S. crude stocks fell, while fuel inventories rose last week, market sources said, citing American Petroleum Institute figures on Tuesday.
– Middle distillates stocks held at Fujairah Oil Industry Zone fell to a two-month low of 2.57 million barrels in the week of December 15, according to industry information service S&P Global Commodity Insights.

NEWS

– Shell has restarted efforts to sell its stake in Germany’s PCK Schwedt oil refinery, three sources familiar with the matter told Reuters, aiming to exit an asset entangled in Western sanctions on Russia and Berlin’s need to secure fuel supplies.

– U.S. President Donald Trump ordered on Tuesday a “blockade” of all sanctioned oil tankers entering and leaving Venezuela, in Washington’s latest move to increase pressure on Nicolas Maduro’s government, targeting its main source of income.

– Saudi Arabia’s Midad Energy has emerged as one of the leading contenders to buy Russian oil major Lukoil’s LKOH international assets, leveraging deep political ties with Moscow and Washington, three people familiar with the matter said.

– Oil prices rose more than 1% on Wednesday after U.S. President Donald Trump ordered “a total and complete” blockade of all sanctioned oil tankers entering and leaving Venezuela, raising fresh geopolitical tensions at a time of concerns over demand.
Source: Reuters