Spot product prices continued to fall in the week to April 12, but the declines were not as sharp as those posted in the previous period. Gasoil sentiment strengthened as spot demand emerged from Sri Lanka and the Philippines, adding to recent demand from Vietnam. Sri Lanka, whose sole refinery traders said is likely currently producing more fuel oil and less gasoil, entered the prompt market for the first time in months as its term contract with PetroChina is slated to end in May. Sources close to the refinery, operated by Ceylon Petroleum, noted that the plant has recently run Oman crude with a greater fuel oil yield, rather than the light crude oil it typically processes. Also, a buying spree by BP helped underpin the market. As of mid-week, the firm had picked up 2.7MM bbl for April, industry sources said. Traders were unsure if BP was storing the barrels in Singapore or possibly covering shorts in Iraq. Jet fuel differentials slid as consumption of heating fuel kerosene continued to drop in Japan with the onset of spring and warmer temperatures. Refiners in Japan and other countries had spent much of the winter months maximizing kerosene output in lieu of jet fuel production.
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