Current Trends in the Asian Middle Distillates Market and Oil Prices
The Asian middle distillates market experiences thin trading activity with stable export estimates from China for April. Refining margins have decreased, and cash differentials declined, while recent geopolitical events are influencing oil prices. No cash deals were recorded, and U.S. inventory trends suggest mixed changes.
The Asian middle distillates market is experiencing thin trading activity following recent fluctuations, with the east-west price spread remaining tight, while ICE gasoil futures are on an upward trend. Analysts are anticipating that Chinese refiners will soon provide April sales offers, as mid-month is approaching, signaling the commencement of new sales activities.
April diesel export projections from China are estimated to remain consistent with March figures, hovering around 400,000 metric tons, while total jet fuel exports are expected to reach approximately 2.2 million metric tons. Refining margins have dipped to approximately $13.30 per barrel for the second consecutive day amidst a notable increase in crude market prices.
Trading volumes remain low, particularly in the 10ppm sulphur gasoil sector, with bids nearly absent. Cash differentials have seen a decline, closing 3 cents lower as they align with a tighter backwardation observed in the April-May timespread. Meanwhile, the profitability of jet fuel has led to an increased arbitrage spread between Asia and the U.S. West Coast, prompting expectations for forthcoming trading discussions.
No notable transactions occurred in the cash market for either gas oil or jet fuel recently. Preliminary surveys suggest that U.S. crude oil inventories likely experienced an increase last week, while diesel and gasoline stocks likely decreased.
In recent news, a cargo ship incident off England’s coast resulted in damage to one tank filled with jet fuel, as per reports from U.S.-based Crowley. Venezuela’s PDVSA has outlined three strategies to maintain oil production and exportation amid impending operational changes with U.S. firm Chevron, whose confidence has been indicated by a recent share purchase in Hess Corp.
Additionally, oil prices have surged, surpassing previous monthly highs due to geopolitical instability in the Middle East and economic stimulus announcements from China. The Yemeni Houthis have communicated intent to persist with actions against Israeli shipping despite U.S. pressures.
The article discusses the current state of the Asian middle distillates market, noting low trading volumes and expectations for new offers from Chinese refiners. Despite dips in refining margins and cash differentials, projections in diesel and jet fuel exports from China remain stable. Recent events, including geopolitical factors and corporate movements, are impacting oil prices and stock levels in the U.S.
Original Source: www.tradingview.com
