RTRS:Asia Distillates-Gas oil's cash diff nears parity in heavy volume
SINGAPORE, Sept 12 (Reuters) - Asia's gas oil market strengthened on Monday,
with the product's cash discount nearing parity amid heavy volume in the
physical spot market.
Some eight trades were concluded, with JP Morgan joining Glencore and Hin
Leong as the dominant buyers in the pricing window.
In total, the three traders bought over 1 million barrels of 0.5 percent
sulphur gas oil at differentials ranging from minus 15 cents to parity, up from
a value of minus 10 cents last Friday.
Glencore and Hin Leong have together bought almost 3 million barrels of the
high-sulphur gas oil this month.
Market sentiment has been lifted by signs of rising Indonesian demand, the
emergence of Chinese imports and an open arbitrage window to the West, traders
said.
"The big story now is Indonesia. They bought around 1.2 million barrels for
September, and are now looking for October cargoes," said a Singapore-based
distillates trader.
Traders said Indonesia could be looking for another 600,000 barrels of gas
oil for October delivery.
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.
Gas oil cracks were steady, with the October spread edging up 4 cents to
$17.33, while the September/October timespread added 2 cents to 16 cents a
barrel, a four-month high.
In the swaps market, 300,000 barrels of the gas oil September swap and
250,000 barrels of the October contract were traded, while 200,000 barrels of
the September/October timespread changed hands during the pricing window.
* SWAPS OUTRIGHTS: Gas oil's September swap fell $4.25 to $121.90 a barrel,
while the October swap shed $4.27 to $121.74 a barrel.
- Jet fuel swaps for September lost $4.20 to $122.80, while the September
regrade, or the difference between jet and diesel prices, gained 5 cents to 90
cents.
* CRACKS: Gas oil's crack for October inched up 4 cents to $17.33 a barrel
over Dubai crude.
- Jet fuel's October crack rose 19 cents to $18.83 a barrel.
* CASH DIFFERENTIALS: The discount for gas oil with 0.5 percent sulphur
narrowed 5 cents to 5 cents a barrel, while the premium for the 0.25 percent
sulphur grade gained 5 cents to 80 cents. The 0.05 percent sulphur grade climbed
25 cents to a premium of $1.90.
- Jet fuel's cash discount edged up 5 cents to 65 cents.
* PHYSICAL OUTRIGHTS: Benchmark diesel with a maximum sulphur content of 0.5
percent was $4.20 lower at $121.75 a barrel, while jet fuel lost $4.10 to
$122.40.
* CASH DEALS: Seven gas oil deals, no jet fuel deal.
- JP Morgan bought two 150,000-barrel cargoes of 0.5 percent sulphur gas oil
from Brightoil for Sep 27-Oct 1 and Oct 2-6 lifting at a discount of 15 cents
and a discount of 5 cents a barrel to Singapore spot quotes, respectively.
- The investment bank bought another 150,000 barrels of the same grade from
Shell for Sep 29-Oct 3 lifting at parity.
- Glencore bought two 150,000 barrel parcels of 0.5 percent sulphur gas oil
for Sep 30-Oct 4 and OCt 7-11 lifting from Brightoil and Shell, respectively, at
a discount of 10 cents for both cargoes.
- The Swiss trader purchased another 150,000 barrels for Sep 27-Oct 1
loading from ConocoPhillips at a 15-cent discount.
- Hin Leong bought 250,000 barrels of the high-sulphur grade from BP for Oct
1-5 lifting at parity to Singapore spot quotes.
- ConocoPhillips sold 150,000 barrels of 0.05 percent sulphur gas oil to
Shell for Sep 27-Oct 1 delivery at a premium of $1.90 a barrel to Singapore spot
quotes.
