Asia’s 10 ppm sulphur gasoil margins extended losses for a second consecutive session, as cautious trading sentiment continue to weigh on discussion levels and market activity on Tuesday.
This was following a drop in overnight heating oil futures in the U.S. and weaker margins in northwest Europe.
Thin market liquidity however cushioned market weakness, with market participants noting more tenders in the market for jet fuel instead of 10 ppm sulphur gasoil.
Economics for selling jet fuel are significantly better in comparison with gasoil, one northeast Asian refiner said.
Refining margins fell to $32.01 per barrel.
Cash differentials closed the trading session lower at $2.89 a barrel, with weakness mitigated by firm mid-February demand from a major Chinese refiner.
Jet fuel refining margins fell to $31.81 a barrel even though some mid-February short covering was still present in the open market.
Regrade traded almost rangebound at a discount of 20 cents per barrel.
SINGAPORE CASH DEALS
– No gasoil or jet fuel deal.
– South Korea’s Hyundai Oilbank sells Feb jet fuel
– U.S. crude oil and distillate stockpiles likely decreased last week, while gasoline inventories were expected to have gone up, a preliminary Reuters poll showed on Monday. Distillate inventories (USOILD=ECI), which include diesel and heating oil, were expected to have dropped by about 1.8 million barrels last week.