Asia’s middle distillates spot activity turned slightly upbeat on Wednesday, with physical jet fuel deals resurfacing on the trading window and sentiment strengthening, though diesel paper market structures and cash premiums barely moved.

The front-month October diesel east-west price spreads were at discounts of around $44 per metric ton, widening slightly from the previous trading session, given the overnight surge in ICE gasoil futures.

So far, shipments from northeast or southeast Asia to Europe are yet to be seen, according to trade sources and shipping data.

At the market’s close, refining margins (GO10SGCKMc1) regained ground and surged back to one-week high levels of slightly above $20 per barrel.

Diesel spot activity was limited, with a buy-sell gap evident and cash differentials (GO10-SIN-DIF) held steady at premiums of 83 cents per barrel.

Jet fuel cash premiums on the window were propped up by firm buying interest and a firm backwardated paper market structure, amid talks of lowered exports from China for October shipment.

Regrade (JETREG10SGMc1) narrowed even further to discounts of 70-80 cents per barrel, with such levels last seen early May, according to some trade sources.

SINGAPORE CASH DEALS

– No gasoil deal, one jet fuel deal

INVENTORIES

– U.S. crude and gasoline stocks fell, while distillate stocks rose last week, market sources said, citing American Petroleum Institute figures on Tuesday.
– Middle distillates stockpiles held at Fujairah Oil Industry Zone slipped to around 1.62 million barrels in the week ended September 22, according to industry information service S&P Global Commodity Insights.

NEWS

– Russian Deputy Energy Minister Pavel Sorokin said on Tuesday that further restrictions on fuel exports are possible if needed, the Interfax news agency reported.
– U.S. oil major Chevron is only able to export about half the crude its joint ventures produce in Venezuela with the latest rules laid out by Washington, three sources close to the matter said.

– Russian energy company Novatek has resumed gas condensate processing at the second unit of its Ust-Luga complex, which was damaged in an August 24 fire caused by a drone attack, three market sources told Reuters.
– Ukraine’s domestic security service carried out a drone strike on the Gazprom Neftekhim Salavat petrochemical plant in central Russia’s Bashkortostan region overnight, a security source told Reuters on Wednesday.

– Oil prices inched up on Wednesday as an industry report showed U.S. crude inventories declined last week, adding to a sense in the market of tightening supplies.
Source: Reuters