December 3, 2018 / 10:43 AM / 6 months ago

Ample inventory weighs on gasoil prices

SINGAPORE (Reuters) - The Asian gasoil cash differentials were under pressure on Monday from ample inventory in the region, with China cranking up exports and rare diesel exports seen from the Philippines, trade sources said.

FILE PHOTO: An oil pump jack pumps oil in a field near Calgary, Alberta, Canada on July 21, 2014. REUTERS/Todd Korol/File Photo

Traders were also focused on term negotiations with South Korean refiners still locked in discussions with buyers to sell gasoil and jet fuel for next year, the sources added.


* Top Philippine oil refiner Petron Corp exported a diesel cargo in November in a rare move, and offered a December-loading shipment, trade sources said.

Petron sold a November-loading 50ppm sulphur diesel cargo for export, the first time in several years, they said.

The cargo was sold to Unipec, the trading arm of China’s state-owned refiner Sinopec, one of the sources said.

Last week, Petron offered a 50ppm sulphur diesel cargo for loading Dec. 17 to 19 from Bataan, the source added. It was not immediately clear if that tender has been awarded.

The Philippines is typically a net importer of diesel and it is not usual for the country to export diesel, traders said.

With Asian diesel refining margins spiking to a four-year high in mid-November, refiners in the region have been maximising output of the oil product which is typically used in the transport, agriculture and industrial sectors.

“Refineries are running high, so they likely had extra cargoes to export,” a second source said.


* Taiwan’s Formosa Petrochemical Corp has finalised its term contracts to sell diesel and jet fuel for loading in 2019, at volumes and price levels mostly steady from this year, trade sources said.

The refiner has sealed its one-year term contract for diesel with 10 parts per million (ppm) sulphur at a premium of 15 to 25 cents a barrel to Singapore quotes, they said.

Formosa has also finalised its 500 ppm sulphur gasoil for 2019 at a discount of 50 cents to 60 cents a barrel to Singapore quotes.

The prices for gasoil contracts vary depending on whether the buyer lifts it monthly or quarterly, two of the sources said.

For jet fuel, it finalised the term contracts at a premium of 5 cents a barrel to Singapore quotes, the sources said.


* Kenya’s oil importers are seeking 664,953 tonnes of oil products for delivery over January to February, a tender document showed.

They are seeking 129,483 tonnes of jet fuel, 313,934 tonnes of diesel and 221,536 tonnes of gasoline. The tender closes on Dec. 6 and is valid until Dec. 7.


* India’s Mangalore Refinery and Petrochemicals Ltd (MRPL) has offered 65,000 tonnes of 50ppm sulphur diesel for Dec. 25 to 27 loading from New Mangalore, a tender document showed.

The tender closes on Dec. 6 and is valid until Dec. 7.

Reporting by Jessica Jaganathan; Editing by Edmund Blair

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