Asia’s middle distillates markets experienced reduced activity after a busy session the previous day. The front-month east-west spread remained tight, even as ICE gasoil futures continued to trend upward.
Traders are cautiously anticipating offers from Chinese refiners, as April’s sales period begins following the mid-month mark. Export estimates for April-loading diesel from China are projected to remain on par with March figures, around 400,000 metric tons, while total jet fuel volumes are expected to be approximately 2.2 million tons.
Refining margins were reported to have dipped for the second consecutive session this week, settling around $13.30 a barrel, particularly amidst a late afternoon uptick in crude prices. Activity in the trading window was limited, with notably few bids for 10ppm sulphur gasoil.
Cash differentials ended the trading day down by 3 cents, reflecting a narrower backwardation in the April-May paper timespreads. For jet fuel, the arbitrage spread between Asia and the U.S. West Coast has widened significantly since the previous session, leading traders to expect forthcoming discussions due to the increased profitability.
However, the regrade for April remained largely unchanged at discounts around $1.2 a barrel. In terms of recent cash deals in Singapore, there were no transactions reported for either fuel category.
Additionally, U.S. crude oil stockpiles are likely to have risen over the past week, while distillate and gasoline inventories likely saw a decrease, according to initial estimates from Reuters. In other news, a jet fuel tank was damaged when a U.S. military-contracted tanker was struck off England’s coast.
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