Asian spot prices fall despite some prompt demand.

摘要

Spot product prices decreased in the week to July 11. However, sentiment for several products was seen strengthening as consumption emerged. Gasoil cracks climbed late in the period after inventory data showed that Singaporean stocks of middle distillates dropped to a four-week low. The stockdraw was despite a sharp rise in diesel arrivals from South Korea, but likely was due in part to rising shipments of ULSD to Australia, where refinery closures have bolstered the country's dependence on Asian fuels. The cash premium for ULSD was on a 10-day rally as of Friday. Similarly, indications that run cuts in Europe were helping draw down that region's supply overhang also lent support to the Asian market. "For Australia, I think it can continue to absorb some of the 10 ppm diesel from the market," a trader opined, adding that the weather would dictate some of the demand's strength. "But for Europe, we really have to wait for a very cold winter or for the US refiner}' production not being able to meet European demand fully." Jet fuel cash differentials fell during the first half of the week, but firmed in later sessions as falling outright prices encouraged some demand. Traders noted that if the price continues to slide, the arbitrage window to Europe will open up. Overall, however, sentiment remained poor as peak summer demand underwhelmed market players. Also, the regrade, or the spread between jet fuel and gasoil, is expected to stay negative in the weeks and months ahead as Chinese material hits the market. A trader noted that while gasoil exports from China are seen steady during H2, jet fuel shipments are slated to rise.