The middle distillates market in Asia experienced limited spot market activity, but a notable spot deal for 10 ppm sulfur gasoil emerged after three weeks. There are mixed expectations on China's export volumes for December, with estimates varying between 450,000 and 600,000 metric tons. The market's cash differentials fell to a deeper discount of 38 cents a barrel, influenced by a closed east-west arbitrage window and the availability of lower-priced sellers. Refining margins for 10 ppm sulfur gasoil declined by almost 2%, while jet fuel refining margins were supported by an open arbitrage window between Asia and the U.S. West Coast. Some refiners are reportedly considering a shift to increased kerosene production in December due to favorable margins for heating and aviation fuel compared to gasoil. Additionally, South Korea's SK Energy is expected to bring back online one of its crude distillation units (CDU) by mid-December after recent repairs. In broader economic news, China has issued an additional 3 million metric tons in fuel oil import quotas for non-state firms in 2023. Meanwhile, oil prices slipped as investors awaited the OPEC+ meeting later in the week for decisions on supply curbs into 2024.

SOURCE: GOOGLE