Asia’s diesel markets remained weighed on by expectations of ample regional supply for the next month, with cash differentials softening further though the paper market structure firmed slightly.

Offers from some northeast Asia refiners were still evident in the spot market, with discussions underway.

Meanwhile, markets were also keeping an eye on Middle East export volumes for December, given the resumption of some refinery operations after unexpected outages earlier.

Kuwait’s exports of diesel and jet fuel were at two-year low levels last month, with limited shipments due to lowered operational productivity at one of its refineries, traders said.

The diesel east-west price spreads remained at discounts of slightly more than $30 per metric ton.

Refining margins were little changed, hovering slightly above $20 a barrel.

Cash differentials eased further despite a firmer backwardated paper market structure as lower-priced offers on the window were readily available.

Meanwhile, on jet fuel, the export arbitrage for Asian suppliers to the U.S. west coast remained narrow and unprofitable for the majority of sellers.

January regrade held firm at premiums of around 30 cents per barrel, though February values were at slight discounts.

SINGAPORE CASH DEALS

– One jet fuel deal, no gasoil deal.

INVENTORIES

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

REFINERY NEWS

– State-owned Kuwait Integrated Petroleum Industries Company (KIPIC) restarted its 205,000 barrels per day crude distillation unit at its Al Zour Refinery on December 13, nearly a month later than initially expected, industry monitor IIR said on Monday.

– PBF Energy extinguished a fire on Sunday morning in a coker unit at its 160,000 barrel-per-day (bpd) Los Angeles-area refinery in Torrance, California, according to a notice filed with the California Office of Emergency Services.

NEWS

– The cost of shipping oil is likely to remain high in the first half of 2026 as the global fleet ages and a rising number of vessels are hit with Western sanctions, shipping sources say, though rates could be capped in the second half.
– The volume of Venezuelan oil already headed to China before the U.S. seized a tanker off the South American country’s coast last week, plus a glut of crude in storage and weak demand, will limit the near-term impact of the move in the Chinese market, traders and analysts said.
– Oil prices fell on Tuesday, adding to the previous session’s losses, as prospects for a Russia-Ukraine peace deal appeared to strengthen, raising expectations of a potential easing of sanctions.
Source: Reuters