RTRS:Asia Distillates-Gas oil's July/August rises to parity
SINGAPORE, July 4 (Reuters) - Asian gas oil strengthened at
the front of the forward curve on Monday, with the prompt
timespread on the cusp of backwardation on signs of firmer
Western demand.
The product's June/July contract was valued at parity by
0830 GMT, up 3 cents, while its August/September contango edged
up 1 cent to six cents a barrel.
The market's strength was also evident in physical spot
trades, where cash differentials for gas oil's 0.5 percent
sulphur grade climbed to a one-month peak on a deal done at
higher price levels.
Market sentiment was lifted on signs of rising Asian diesel
exports to Brazil, which is struggling to meet domestic demand
due to expanding economic activity, traders and analysts said.
At least 350,000 tonnes of North Asian diesel have been
booked for shipment to Brazil for loading in the past month,
shipping data showed.
"Everyone's still looking for China to start buying, but in
the meantime, Brazil is providing an additional outlet for
cargoes. They're short on diesel, so it will be interesting to
see if they keep buying," said a Singapore-based distillates
trader.
Gas oil cracks slipped but stayed above $18 a barrel for a
second session, as higher crude prices versus last Friday's
session weighed on the spread.
Trading activity in the swaps market was heavy for a second
session, with at least 550,000 barrels of gas oil's fixed-price
swap transacted at $124.50-$124.80 by 0830 GMT, steady to
volumes seen last Friday.
The jet market remained lacklustre, with the front-month
premium to gas oil falling to a one-month low below 50 cents a
barrel. At least 100,000 barrels of the July regrade changed
hands at 45 cents a barrel during the pricing window.
However, jet's cash differential strengthened on the back of
a deal done at narrower discounts.
India's Mangalore Refinery and Petrochemicals (MRPL)is
offering 36,000 tonnes of jet fuel for Aug 23-25 loading via a
tender which closes on July 7 and is valid till a day later,
tender documents showed on Monday. MRPL last sold jet for
early-August loading to BB Energy at a discount of around $1.20
to Singapore spot quotes, traders said.
* SWAPS OUTRIGHTS: Gas oil's July swaps rose 10 cents to
$124.55 while the August swap gained 7 cents, also to $124.55 a
barrel.
- Jet swaps for July were valued at $125.01 a barrel, up 4
cents, with the July regrade (the difference between jet and
diesel prices) falling 6 cents to 46 cents.
* CRACKS: Gas oil's crack for August fell 52 cents to $18.40
a barrel over Dubai crude.
- The August jet fuel crack also shed 52 cents to $19.25.
* CASH DIFFERENTIALS: The discount for gas oil with 0.5
percent sulphur was up 13 cents to 22 cents, while the premium
for the 0.25 percent sulphur grade was flat at 20 cents. The
premium for the 0.05 percent sulphur grade slipped 20 cents to
$1.45 a barrel.
- Jet fuel's cash discount rose 7 cents to 50 cents.
* PHYSICAL OUTRIGHTS: Benchmark diesel with a maximum
sulphur content of 0.5 percent rose 20 cents to $124.35 a
barrel, while jet fuel prices added 15 cents to $124.65.
* CASH DEALS: One gas oil and one jet fuel deal.
- Totsa bought 250,000 barrels of 0.5 percent sulphur gas
oil for July 19-23 lifting at 20 cents a barrel below Singapore
spot quotes from Hin Leong.
- Glencore sold 150,000 barrels of jet fuel to Morgan
Stanley for July 19-23 loading at a discount of 50 cents to
Singapore spot quotes.
