RTRS:Asia Distillates-Gas oil steady as Formosa exports eyed
SINGAPORE, Sep 1 (Reuters) - Asia's gas oil market was steady on Thursday,
as traders weighed the prospect of diesel exports from Formosa resuming in the
second half of September.
The October crack spread, which became the front month contract on Thursday,
edged up 13 cents to $18.25 a barrel by 0830 GMT, while the product's
September/October contango slipped 3 cents to 13 cents a barrel.
Taiwan's Formosa Petrochemical Corp will restart the second of
three crude distillation units (CDU) this weekend at its 540,000 barrels per day
(bpd) refinery, which was completely shut following a fire at the end of July, a
trader familiar with the situation said.
The third CDU will be restarted by the first half of September, with exports
to resume in the second half if no problems are encountered, he added.
"If all goes well we can start exporting in the second half of September,"
said the trader.
Formosa, Asia's fifth largest refinery, restarted its first CDU on Aug. 19,
traders had said. .
Sentiment was also depressed by rising stockpiles of middle distillates in
Singapore over the past week. Onshore diesel and jet stocks rose 2 percent to
a 2-week high over 13 million barrels in the week ended Aug 31, official
data showed on Thursday.
In the physical spot market, the cash discount for the 0.5 percent sulphur
grade gas oil strengthened after Glencore bought two cargoes at narrower
discounts.
There were heavy volumes done in the swaps market, with at least 850,000
barrels of the September fixed-price contract done at $127.10-$127.30 by 0830
GMT, up from 450,000 barrels in the previous session.
The jet fuel market was weaker, as traders bet on North Asian refiners to
ramp up production of kerosene ahead of winter. The product's September premium
to gas oil fell 35 cents to $1.65 a barrel.
* SWAPS OUTRIGHTS: Gas oil's September swap gained 18 cents to $127.33 a
barrel, while the October swap rose 15 cents to $127.45 a barrel.
- Jet fuel swaps for September fell 17 cents to $128.98 a barrel, while the
September regrade, or the difference between jet and diesel prices, slipped 35
cents to $1.65.
* CRACKS: Gas oil's crack for October rose 12 cents to $18.29 a barrel over
Dubai crude.
- Jet fuel cracks dipped 8 cents to $20.29 a barrel.
* CASH DIFFERENTIALS: The discount for gas oil with 0.5 percent sulphur
narrowed 15 cents to 30 cents, while the premium for the 0.25 percent sulphur
grade rose 10 cents to 90 cents a barrel. The 0.05 percent sulphur premium
slipped 5 cents to $1.65 a barrel.
- Jet fuel's cash discount inched down 2 cents to 42 cents.
* PHYSICAL OUTRIGHTS: Benchmark diesel with a maximum sulphur content of 0.5
percent rose 30 cents to $127.05 a barrel, while jet fuel dipped 15 cents to
$128.70.
* CASH DEALS: Four gas oil deals, no jet fuel deals.
- Glencore bought 150,000 barrels of 0.5 percent sulphur gas oil from
Brightoil for Sep 17-21 lifting at a discount of 35 cents a barrel to Singapore
spot quotes.
- The Swiss trader bought another 150,000-barrel cargo of the same grade
from SPC for Sep 21-25 lifting at 30 cents a barrel below Singapore spot quotes.
- Shell bought 150,000 barrels of 10-ppm sulphur grade gas oil from Vitol
for Sep 16-20 lifting at a premium of $2.60 a barrel.
- BP bought 150,000 barrels of 10-ppm sulphur grade gas oil from Mitsui at a
$2.50 premium.
