Diesel window activity minimal; Asia-US jet fuel spread widen

Trading activity in Asia's diesel markets remained thin on Tuesday, although some procurement tenders were outstanding in Southeast Asia, while the swaps backwardation structure firmed on the last trading day of June.

July spot sales slowed slightly, with one regional refiner heard to have withdrawn from export discussions.

Meanwhile, some procurement tenders for July shipments and beyond were still ongoing in southeast Asia, lending support on the demand front.

The east-west price spreads narrowed slightly but remained at discounts of about $60 per metric ton, trade sources said.

Refining margins (GO10SGCKMc1) fell marginally to around $44.4 a barrel.

Cash differentials (GO10-SIN-DIF) inched up to $1.3 a barrel, in line with a wider backwardation in paper markets, but lower priced offers capped gains.

Meanwhile, in the jet fuel market, the Asia-U.S. west coast price spreads widened slightly from last week to more than $20 a barrel, though enquiries on this trade route were minimal.

Regrade (JETREG10SGMc1) narrowed to smaller discounts of around 80 cents per barrel.

SINGAPORE CASH DEALS

- No deal for gasoil or jet fuel

INVENTORIES

- U.S. crude oil stockpiles were expected to have fallen last week, along with distillate and gasoline inventories, a preliminary Reuters poll showed on Monday.

NEWS

- Morgan Stanley lowered its Brent crude price forecast for the rest of the year and next, citing a faster-than-expected reopening of the Strait of Hormuz, and said market focus has shifted back to a larger surplus expected in 2027.

- Oil prices slipped on Tuesday, and were set for their biggest quarterly loss since the COVID-19 pandemic in early 2020, with investors eyeing potential U.S.-Iran talks in Doha amid a strained interim ceasefire in the four-month-old war.

- Iraq's SOMO has offered wide discounts to its official selling prices to term buyers to attract them to lift Basrah crude from its terminal inside the Middle East Gulf in July, according to trade sources and a document reviewed by Reuters.

- Indonesia is to start its national B50 fuel mandate, a blend of 50% palm-based diesel and 50% conventional diesel, on Wednesday as part of its push for energy independence, but slumping oil prices and costlier palm oil threaten its viability, analysts say.

PRICES