RTRS:Asia Distillates-Gas Oil supported as China imports eyed
SINGAPORE, Sept 8 (Reuters) - Asian gas oil's front-month
timespread rose to four-month high on Friday as market
participants weighed the impact of a rare import of diesel from
China.
PetroChina , China's second-largest state refiner,
purchased two diesel cargoes for September to replenish thinning
domestic stocks after heavy regular maintenance and refinery
accidents cut production, traders said on Friday.
Traders said the volumes reported were relatively small,
although the market may receive a boost if this heralds the
beginning of more imports from the world's biggest energy
consumer.
"We have to wait and see whether this is just a one-off or
will there be more regular imports," said a Singapore-based
distillates trader.
Gas oil's September/October grade edged up 4 cents to a
backwardation of 14 cents a barrel by 0830 GMT, its highest
level since May 31.
The discount for 0.5 percent sulphur grade widened 5 cents
to 10 cents a barrel, as traders Hin Leong and Glencore
continued their buying spree during the pricing window.
Hin Leong has bought over 1 million barrels of the
high-sulphur gas oil this week, while Glencore has picked up
800,000 barrels of the same grade since the start of the month.
Traders said the market was also supported by heavy buying
from Indonesia, as well as an open arbitrage window to the west.
Trading activity in the swaps market was focussed on the
timespreads, with 500,000 barrels of the September/October
contract traded at 13-15 cents. Another 50,000 barrels each of
the November/December and January/February timespreads were also
done.
There were also heavier than usual activity in the regrade,
with JP Morgan buying 200,000 barrels of the September contract
and J Aron picking up 100,000 barrels of the October contract.
* SWAPS OUTRIGHTS: Gas oil's September swap fell 90 cents to
$126.15 a barrel, while the October swap was 94 cents lower at
$126.01 a barrel.
- Jet fuel swaps for September shed 75 cents to $127.00,
while the September regrade, or the difference between jet and
diesel prices, gained 15 cents to 85 cents.
* CRACKS: Gas oil's crack for October dipped 16 cents to
$17.29 a barrel over Dubai crude.
- Jet fuel's October crack lost 6 cents to $18.64 a
barrel.
* CASH DIFFERENTIALS: The discount for gas oil with 0.5
percent sulphur widened 5 cents to 10 cents, while the premium
for the 0.25 percent sulphur grade fell 15 cents to 75 cents.
The 0.05 percent sulphur grade was flat at a premium of $1.65.
- Jet fuel's cash discount was steady at 70 cents.
* PHYSICAL OUTRIGHTS: Benchmark diesel with a maximum
sulphur content of 0.5 percent was $1.00 lower at $125.95 a
barrel, while jet fuel lost 75 cents to $126.50.
* CASH DEALS: Four 0.5 percent sulphur gas oil deals, no jet
fuel deal.
- Hin Leong bought 150,000 barrels from BP for Sep 24-28
lifting at a discount of 25 cents a barrel to Singapore spot
quotes.
- Hin Leong bought another 180,000 barrels from Shell for
Sep 24-28 lifting at parity to Singapore spot quotes.
- Glencore bought 150,000 barrels from ConocoPhillips for
Sep 24-28 delivery at a discount of 35 cents a barrel.
- The Swiss trader bought another 175,000 barrels from Shell
at a discount of 20 cents for Oct 5-9 lifting.
