SINGAPORE - Singapore onshore diesel and jet fuel stocks fell for a third consecutive week which helped support cash differentials but traders expect inventory to build over the next few weeks, they said on Thursday.
Singapore's middle distillates stocks fell nearly 4 per cent to a two-week low of 9.233 million barrels in the week to Jan. 13, latest data from International Enterprise showed.
Traders expect storage volumes to build over the next few weeks as a wider contango, which is the price difference between current and forward months, make it more profitable to store diesel now, they said.
China will no longer cut domestic retail prices for gasoline and diesel when global oil prices are below $40 a barrel, the country's powerful state planning commission said.
A few experts believe that time is ripe for full price liberalisation, which would help stem illicit oil flows as smuggled diesel has made a foray into the eastern and southern shores in the recent weeks after Beijing halted the price cut in December, several senior oil traders said.
Traders expect volumes heading to China to increase further, helping to absorb some of the glut in Asia.
Taiwan's Formosa Petrochemical Corp sold 480,000 barrels of 500ppm sulphur gasoil for Feb. 11 to 15 loading to Winson Oil at a discount of 65 cents a barrel, traders said.
This is slightly higher than a late January loading cargo sold by the refiner earlier, they added.
Japan's biggest refiner, JX Nippon Oil & Energy Corp, said on Thursday it had cut its crude oil refining plan for domestic use in January by 3.6 per cent from its original plan due to sluggish kerosene demand in a mild winter.
The company, the core business unit of JX Holdings Inc, lowered its refining plan for domestic markets for the month to 1.07 million barrels (5.29 million kilolitres) per day (bpd) from an initial 1.11 million bpd.
JX also decided not to import jet fuel this month as planned earlier, a JX spokeswoman said, but it kept unchanged its plans to export about 124,000 bpd of oil products for the month amid favourable export margins.
In the Gulf, Kuwait Petroleum Corp (KPC) likely sold 40,000 tonnes of jet fuel for loading over Jan. 27 to 28 to Mena Energy at a premium of $1.60 a barrel above Middle East quotes, traders said, though this could not be confirmed.
It last sold a jet fuel cargo to Total for Dec. 22 to 23 loading at a similar premium, traders said.
KPC has offered a prompt high sulphur gasoil cargo in a separate tender, though the reason was not immediately clear.
- KPC has offered 40,000 tonnes of 0.2 per cent sulphur gasoil for Jan. 23 to 24 loading. The tender closes on Jan. 14, with same-day validity.
SINGAPORE CASH DEALS: Three gasoil deals, one jet fuel trades.
- Total bought 150,000 barrels of 10ppm sulphur diesel for Jan. 29 to Feb. 2 loading from Unipec at a premium of 60 cents a barrel to the average of Jan. 28 to Feb. 3 Singapore quotes.
- Total bought 150,000 barrels of 10ppm sulphur diesel for Feb. 8 to 12 loading from Unipec at a premium of 70 cents a barrel above the average of Feb. 4 to 12 Singapore quotes.
- Shell bought 150,000 barrels of 500ppm sulphur gasoil for Feb. 9 to 13 loading from Winson Oil at a discount of 50 cents a barrel to the average of Feb. 5 to 15 Singapore quotes.
- Vitol bought 100,000 barrels of Feb. 8 to 12 loading from BP at a discount of 50 cents a barrel above the average of Feb. 5 to 15 Singapore quotes.