Asia’s middle distillates market remains lukewarm, with limited trading activity reported. However, there has been a noticeable uptick in paper market transactions as April sales momentum from key refiners gains traction. Spot premiums for April deliveries are increasing, driven by production losses due to refinery maintenance and a decline in swing cargoes arriving in Asia.
Chinese refiners are reportedly making some offers for April jet fuel, although the specifics of these offers have not been confirmed. Demand from Vietnam has emerged, but the purchasing volumes are described as minimal by industry sources. There is some caution regarding diesel demand across Southeast Asia, where buying interest has softened in certain regions.
Refining margins have continued to decline, now sitting at approximately $14.3 per barrel, nearing one-month lows. The cash differentials for 10ppm sulphur gasoil have slightly decreased due to a narrowing timespread between March and April, leading to reduced activity in the market. Jet fuel cash markets have dropped to 28 cents per barrel, hampered by an abundance of low-priced offers.
The regrade for jet fuel remains relatively unchanged, hovering at discounts of around $1.1 per barrel. In terms of cash deals, there were no transactions reported for either fuel type. Recent statistics indicate that U.S. crude oil stockpiles likely increased last week, while both distillate and gasoline inventories are expected to have declined.
In notable news, Saudi Aramco’s CEO has called for a reassessment of energy transition strategies and emphasized the necessity for investment in fossil fuels. Indonesia is also advancing plans to construct oil refineries across several islands, upping its capacity significantly. Oil prices have recently recovered from early declines, even amid concerns regarding a potential recession in the U.S. and OPEC+’s plans to increase supply.