Asia distillate swaps rose on Thursday, up 0.6-1.0 percent along their 12-month curve, while the prompt timespread surged to a four-week high and gas oil cracks hovered near one-month peaks as freezing temperatures stoked heating fuel demand.

Physical gas oil and jet cargo prices also lingered around 15-month highs.

The jet fuel market remains firm due to increased kerosene heating
demand from north Asian markets like Japan and China, as well as higher
air travel during the year-end holidays and ahead of the Lunar New Year
festivities.

Also boosting sentiment was China Aviation Oil’s (CAO) purchase of
another 95,000 tonnes or 760,000 barrels of jet fuel via tender for
second-half January delivery at marginally higher prices, after
importing up to 120,000 tonnes of jet fuel for loading between Jan. 25
and Feb. 22 last month.

Gas oil fundamentals strengthened due to the cold spell. Arctic winds
have pushed down into the Northern Hemisphere, freezing Europe and
parts of Asia, and boosting demand for heating in the United States by
some 21 percent above normal.

European energy demand has surged, especially in Britain and France,
while heavy snow and record low temperatures in China prompted cities
across eastern and central parts of the country to begin rationing
power.

“Gas oil looks well-supported from the cold snap, while the CAO tender
gave the jet market a nice boost,” said a regional distillates trader.

But high volumes of distillates stored on land and at sea are expected
to cap the market’s gains, as worries linger that winter heating demand
will not be suffice to reduce the glut.

Shipbroker SSY estimates the volume of heating gas oil and diesel
stored on tankers at sea had surged above 100 million barrels as at
end-November, from 81.7 million barrels at end-October, beating earlier
forecasts and surpassing the world’s daily consumption of under 85
million barrels in 2009.

* GAS OIL SWAP TIMESPREADS: The January/February contango shrank for a

second day by 18 cents to an over four-week high of 88 cents a barrel, reflecting firmer market sentiment.

* CRACKS: Diesel cracks eased by 8 cents to $8.52 a barrel, holding near one-month high levels.

* SWAPS TRADES: Activity quietened slightly on Thursday, with at least
150,000 barrels of January diesel swaps changing hands at $88.60-$88.70
a barrel, while another 350,000 barrels of the Jan/Feb spread were
traded at minus 90 cents to $1.00 a barrel.

At least 100,000 barrels of the February regrade were traded at $2.10-$2.30 a barrel.

* CASH DIFFERENTIALS: The discount on diesel’s cash differential for
the 0.5 percent sulphur grade eased by 5 cents to 60 cents a barrel to
Singapore spot quotes.

Similarly, the discount for the 0.25 percent sulphur grade fell by 5
cents to 35 cents, while the premium for the 0.05 percent sulphur grade
rose by 5 cents to 10 cents.

* PHYSICAL OUTRIGHT PRICES: Benchmark diesel with a maximum sulphur
content of 0.5 percent rose by 90 cents for a third day to $88.40 a
barrel, its highest

level since Oct. 8, 2008.

Jet fuel prices also gained for a third day by 50 cents to $90.85 a barrel, their highest since Oct. 14, 2008.

* CASH TRADES: No deals.

* TENDERS: Vietnam’s Petrolimex is seeking via tender 198,000 tonnes of
diesel for first-quarter delivery. The tender closes on Jan. 12, with
offers to remain valid until Jan. 18.

Taiwan’s Formosa Petrochemical Corp sold 720,000 barrels of 0.05
percent gas oil via tender for Feb. 5-9 lifting at slightly higher
prices ranging from a small discount to parity to Singapore spot
quotes, FOB, reflecting stronger market sentiment.

China Aviation Oil (CAO) has bought another 95,000 tonnes or 760,000
barrels of jet fuel via tender for second-half January delivery at
marginally higher prices of around parity to Singapore spot quotes,
FOB, versus an earlier deal, as demand firms.

Source: Reuters

Search to find what you want

• Asia-cracks distillates falling below $ 9/Bbl

    Asian distillate swaps fell by about 1.7-1.8 percent along the 12-month forward curve on Wednesday, with cracks extending losses, falling below $9.00 a barrel as subdued demand dragged values down. A strike in France, which had supported sentiment, was expected to end as Total’s refinery workers were likely to favour

• Distillates Asia-cracks surge, watch sellers in Chile

    Asian distillate swaps rose 0.9-1.3 percent along their 12-month forward curve on Wednesday, while cracks surged to 11-month highs, as expectations mounted that supply disruptions in quake-hit Chile would help cut bloated inventories. In contrast, the jet fuel market remained in the doldrums, with the March regrade hovering near parity

• Asia-gas-oil distillates diffs increase to month highs

    Asia distillates prices rose for a fifth straight session on Wednesday, up 0.5-1.0 percent along the 12-month forward curve, with the jet fuel price spread to gas oil strengthening to a 10-month high above $3.00 a barrel.

• Oil dips below $ 77 as a growing U.S. inventories

    Global oil prices remained below $77 a barrel in Asian trade Thursday mainly on reports of increase in US stockpiles while fuel demand dropped. Light sweet crude for January delivery was seen trading at $ 76.94 a barrel at 11.30 a.m Singapore time while Brent crude was at $ 78.41

• Oil stays below $ 70 in Asian trade

    Global oil prices eased further in Asian trade Monday, for the ninth day in succession, amid concerns about the level of US demand and a stronger dollar. Light sweet crude for January delivery was seen trading at $69.42 a barrel at 11.30 a.m Singapore time after hitting as low as

• Middle East oil at discounts as the Saudis keep exports steady

    Crude oils for sale from the Middle East to Asia maintained their discounts on expectations Saudi Arabia will supply full volumes to refiners in the region. Qatar Marine for March loading was at a discount of 25 cents a barrel to its official selling price, according to data compiled by

• Crude oil inventories rise by 2.3 million barrels

    Crude inventories rose last week, while gasoline supplies decreased, the government said Wednesday. Crude inventories rose by 2.3 million barrels, or 0.7 percent, to 329 million barrels, which is 6.1 percent below year-ago levels, according to the Energy Department’s Energy Information Administration’s weekly report. Analysts expected a drop of 1

• Middle East crude oil rises after Saudi Arabia lowers prices

    Crude oil from the Middle East sold to Asia rose against benchmarks after Saudi Arabia lowered its official prices, raising expectations of improvements in processing profits.

• Oil jumps to fresh 1-year high of 76 U.S. dollars per barrel

    Oil prices reached a fresh one-year high near $76 a barrel Thursday in Asia on a weaker U.S. dollar and growing investor optimism about an economic recovery. Benchmark crude for November delivery was up 72 cents to $75.90, the highest since October 2008, by midday Singapore time in electronic trading on the

• Oil falls below $ 81 in Asian trade

    World oil prices extended falls in Asian trade Monday mainly on concerns over energy demand following mixed economic reports. Light sweet crude for April delivery was seen trading at $ 80.78 a barrel at 11.30 a.m Singapore time while Brent crude was at $ 79.62 a barrel at the same

• Oil falls below $ 81 in Asian trade

    World oil prices extended falls in Asian trade Monday mainly on concerns over energy demand following mixed economic reports. Light sweet crude for April delivery was seen trading at $ 80.78 a barrel at 11.30 a.m Singapore time while Brent crude was at $ 79.62 a barrel at the same

• Oil below $ 80 easier in Asian trade

    World oil prices remained below $80 a barrel mark for the third day in succession on Monday mainly on profit taking by investors. Light sweet crude for December delivery was seen trading at $79.77 a barrel t 12.00 noon Singapore time while Brent crude was at $78.41 a barrel at

• Oil hovers above U.S. $ 71 in Asia under sagging U.S. dollars

    Oil prices are above $71 a barrel in Asia signs of weak crude demand were offset by a slumping US dollar. Benchmark crude for November delivery was down 29 cents at $71.47 a barrel by midday Wednesday Singapore time in electronic trading on the New York Mercantile Exchange. The contract

• Oil makes less than $ 75 on dollar recovery

    World oil prices eased below $75 a barrel in Asian trade Friday after the greenback gained on unconfirmed EU decision to bailout Greece.

• Oil rises above $ 70 in Asia, weakening U.S. dollars

    Oil prices rose above $70 a barrel Thursday in Asia amid a weakening U.S. dollar and mixed crude inventory data. Benchmark crude for November delivery was up 61 cents at $70.17 by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost $1.31 to