Diesel markets thinly discussed though east-west spread widens further

Asia's diesel markets remained thinly discussed on the trading window, despite a firmer paper swaps backwardation structure, with traders looking for signs of August spot offers emerging soon.

The east-west price spread widened even further to discounts of more than $80 per metric ton, several trade sources said, with such levels hovering at two-month wide levels.

Traders are expecting swing suppliers to send more cargoes to the West for the time being, given better margins. Freight costs to ship around 90,000 tons of refined fuels from northeast Asia to northwest Europe were around $5.2 million, or $57 per metric ton.

Refining margins (GO10SGCKMc1) extended gains, rising back to nearly $49 a barrel - a three-week high.

Cash differentials (GO10-SIN-DIF), however, barely moved, trading slightly more than premiums of $1.2 a barrel.

Meanwhile, for jet fuel, physical discussions on the window warmed up slightly, though deals were scant.

Again some talks of traders looking to send shipments on the east-west route resurfaced, with at least two cargoes loading from northeast Asia under discussion.

Regrade (JETREG10SGMc1) eased to wider discounts of nearly $1 a barrel.

SINGAPORE CASH DEALS

- No deal for gasoil or jet fuel.

INVENTORIES

- Oil product stocks in Asia's key trading hub Singapore have eased following a rebound last week, led by a dip in inventories across the barrel, official data showed on Thursday.

- U.S. crude stocks fell to their lowest last week since 2018 as domestic refinery demand rose, while gasoline inventories also fell ahead of the July 4 holiday weekend, the Energy Information Administration said on Wednesday.

NEWS

- Oil prices dropped about 1% on Thursday, down for a third consecutive day, after Qatar said Iran and the U.S. had made progress in indirect talks focused on the Strait of Hormuz, which handled one-fifth of global oil supply before the war.

- At least five supertankers carrying a total 10 million barrels of Saudi oil loaded from Ras Tanura have exited the Strait of Hormuz, with Saudi Aramco switching to spot pricing to speed sales in Asia, according to trade sources and shipping data.

PRICES