Asia’s middle distillates markets are quiet amid expectation of April offers from China. Diesel and jet fuel export estimates align with March levels. Refining margins have decreased, while cash differentials show minor setbacks. Current geopolitical events are impacting oil prices, with strategic movements evident in industry activities.
Recent activity in Asia’s middle distillates markets has been relatively inactive following a busy trading day, with the front-month east-west market remaining tight. Concurrently, ICE gasoil futures have continued to trend upwards. Traders are now anticipating April offers from Chinese refiners, as sales activities typically ramp up after mid-month.
Expected export levels for April-loading diesel from China are projected to mirror those of March at approximately 400,000 metric tons, while jet fuel volumes are estimated to reach around 2.2 million tons. Meanwhile, refining margins have decreased for the second consecutive session, averaging about $13.30 per barrel, coinciding with a surge in the crude market late in the afternoon.
Trading activity remains subdued, particularly with 10ppm sulphur gasoil, lacking sufficient bids. Cash differentials closed the session at 3 cents lower, reflecting a tighter backwardation in the April-May paper timespreads. The arbitrage spread for jet fuel between Asia and the U.S. West Coast has expanded significantly, suggesting potential profit opportunities, with traders keenly awaiting further discussions.
April’s regrade remains stable, noted at discounts around $1.2 per barrel. In terms of market transactions, there were no recorded deals for either gasoil or jet fuel. For inventories, a preliminary poll by Reuters suggests that U.S. crude oil stockpiles likely increased last week, while distillate and gasoline inventories are expected to have declined.
In current events, damage was reported to a single tank filled with jet fuel due to a maritime incident off the coast of England. Additionally, Venezuela’s PDVSA has developed three operational plans to maintain oil production and exports at its major joint venture with Chevron. Furthermore, Chevron has acquired a 4.99% stake in Hess Corp, signifying confidence in its upcoming acquisition plans. Global oil prices have risen by over 1% amid regional instability and economic stimulus from China.
Concerning price movements, spot gas oil prices have shown slight increases, while the cash differentials for middle distillates have seen minor fluctuations. For detailed derivative pricing, further resources are available by referencing the provided RICs.
In summary, Asia’s middle distillate markets are currently experiencing thin trading volumes, with traders anticipating new offers from Chinese refiners. Key export estimates for diesel and jet fuel remain steady, while refining margins are declining. Current geopolitical events continue to influence oil prices, reflecting a complex interplay of market demand and international dynamics. Furthermore, strategic plans from industry players such as Chevron and PDVSA indicate ongoing shifts in the global oil landscape.
Original Source: www.tradingview.com
