Asia’s middle distillates markets have struggled with a lack of trading activity for the third consecutive session this week. Despite this, cash differentials have remained relatively supported due to increased buying interest. Market participants are particularly interested in the upcoming discussions regarding May refiner sales. Attention has shifted towards China’s second batch of refined fuel export quotas, which reflected slightly lower clean product volumes compared to the previous year.
The earlier issuance of these quotas caught some traders off guard since the first batch has not yet been fully utilized. As refiners prepare to begin sales for May, traders are closely watching forthcoming spot discussions scheduled for next week. The 10ppm sulphur gasoil refining margins concluded the trading session at approximately $13 per barrel, marking a return to nearly six-month low levels. Although trading activity remains minimal, the buy-sell gap has narrowed somewhat, indicating a modest uptick in bullish buying behavior.
Notably, cash differentials climbed by 10 cents per barrel from the previous session, reaching 19 cents per barrel, with a week-on-week increase of 3 cents. The regrade sustained a discount of $1.1 per barrel. In Singapore’s cash deals, no transactions were reported for either fuel this week. On the inventory front, gasoil stocks held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub decreased by nearly 3% from the previous week, hitting their lowest levels since early November, according to data from Dutch consultancy Insights Global.
In refinery news, Suncor Energy of Canada identified and isolated the source of a hydrocarbon spill at its Sarnia refinery. Additionally, oil prices have eased slightly but remain near one-month highs, driven by a tightening global supply outlook, following U.S. tariffs on countries buying Venezuelan oil and curbs on Iranian oil trade. Furthermore, Indian port authorities recently denied entry to an aging tanker carrying Russian crude due to lack of proper documentation, signifying increased scrutiny of vessels transporting Russian oil. Traders also anticipate that Saudi Arabia may reduce its crude prices for Asian buyers to a three-month low, following significant declines in benchmark prices.