Asian gasoline market in contango as supply surges

: Oil products
24/10/02

The Asian gasoline market structure flipped into contango — where later deliveries are priced at a premium to prompt arrivals — on 1 October because of an influx of cargoes from Saudi Arabia and China.

The balance October and November spread was assessed around $0.05-0.10/bl in contango. The last time the market structure was in contango was on 20 June when the spread fell to -$0.05/bl. The gasoline crack spread, or the Argus Singapore 92R gasoline spot assessments against Ice Brent, also reflected the weakness as it fell to $3.05/bl yesterday, the lowest since 20 October 2023 when the crack spread was at $3.01/bl.

The reason for the drop could be because of an influx in gasoline cargoes from Saudi Arabia, market participants said. There are a number of gasoline cargoes loading from Jizan, Saudi Arabia in September and are making their way towards Singapore, gasoline traders said. This could be related to the fall in spreads, said a Dubai-based gasoline trader.

About 113,000t (955,000 bl) of gasoline could be loading from the Jizan refinery around 9-13 September and is expected to arrive in end-September, according to global trade analytics platform, Kpler. This marks a significant increase from August's volumes of just 12,000t and is the highest since February, Kpler data show. This increase was also reflected in data from oil analytics firm Vortexa, which showed about 85,000t expected to ply the route in September as compared to below 10,000t in August.

The Jizan refinery has been exporting gasoline cargoes but mainly to the US. The US accounted for 61pc and 28pc of total export volumes in July and August respectively, according to Kpler.

An anticipated surge in Chinese gasoline exports in October also placed a cap on crack spreads. Exports are expected to increase in October because of improved export economics and the rapid development of new energy vehicles (NEVs) which reduces domestic demand and margins for gasoline. Chinese companies plan to export 190,000 b/d of gasoline in October, a rise of 60,000 b/d or 44pc from September, although the volume is 20,000 b/d or 11pc lower from a year earlier.

The release of Chinese export quota also eased concerns of a tight market in the fourth quarter. China exported around 26.17mn t of clean products from January to August 2024, GTT customs data show. An Argus survey suggests that China could also be exporting an estimated 5.29mn t from September to October 2024, bringing the total export volume to around 31.46mn t, which means about 9.54mn t quota left will remain for November to December 2024. Based on the January-September clean product export split, there should be more than 1mn t/months of quota for gasoline exports during November to December. In comparison, China exported an average of 750,000t of gasoline each month from January to October 2024.

By Aldric Chew

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24/10/02

US dockworkers, shippers strike positions entrenched

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California eyes more oilseed limits as LCFS vote nears

24/10/02

California eyes more oilseed limits as LCFS vote nears

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Calif. minimum gasoline reserve bill heads to Senate

24/10/01

Calif. minimum gasoline reserve bill heads to Senate

Houston, 1 October (Argus) — The California State Assembly today passed a bill that would authorize the state's energy regulator to require refiners to maintain minimum gasoline inventories, the latest measure in governor Gavin Newsom's ongoing legislative efforts to mitigate price spikes at the pump. The assembly today passed AB X2-1 with a 44-17 vote, sending the bill to the California Senate for committee and then floor hearings. The bill, if passed by the Senate and signed into law by Newsom, would authorize the California Energy Commission (CEC) to regulate, develop and impose requirements for in-state refiners to maintain minimum stocks of gasoline and gasoline blending components. The CEC would have the authority to penalize refiners who fail to comply. The bill comes on the back of a transportation fuels analysis by the CEC's Division of Petroleum Market Oversight (DPMO) that concluded days of refined product supply in California is a key driver of price spikes. A minimum road fuels inventory requirement is unprecedented in the US but has been implemented in various forms in Australia, New Zealand, the Philippines and Mexico. Proponents of the bill say maintaining "normal" inventory levels of gasoline will mitigate against price spikes for consumers. Critics, such as the west coast refining industry, say the government has misdiagnosed what it a broader supply problem for California where limited refining capacity and import infrastructure have created a "fuel island". By Nathan Risser Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Some eastern US rail shipments restart after Helene

24/09/30

Some eastern US rail shipments restart after Helene

Washington, 30 September (Argus) — Some railroad operations in the southeastern US have resumed in the aftermath of Hurricane Helene, but major carriers warn that some freight may be delayed while storm-damaged tracks are repaired. Rail lines in multiple states were damaged after Hurricane Helene made landfall on the northeastern Florida coast on 26 September as a category 4 storm and traveled northwards as a downgraded but still dangerous storm into Georgia, Tennessee, and the Carolinas. The storm left significant rain and wind damage in its wake, including washed-away roads, flooded lines, downed trees and power outages. Eastern railroads CSX and Norfolk Southern (NS) said they are working around the clock to restore service to their networks. Norfolk Southern said it had made "significant progress" towards its recovery with most major routes back in service including its Chattanooga, Tennessee, to Jacksonville, Florida, line as well as its Birmingham, Alabama, to Charlotte, North Carolina route. Norfolk Southern said freight moving through areas that are out of service could "see delays of 72 hours". Several of Norfolk Southern's other routes remain out of service, including rail lines east and west of Asheville, North Carolina, because of historic levels of flooding. There are multiple trees to remove along a 70-mile stretch from Macon, Georgia, to Brunswick, Georgia. And downed power lines are keeping the railroad's lines from Augusta, Georgia, to Columbia, South Carolina, and Millen, Georgia, out of service. CSX said "potential delays remain" but did not provide specifics. However, the railroad said it had made "substantial progress" in clearing and repairing its network. The railroad's operations in Florida have mostly reopened, as have rail lines in its Charleston subdivision, which crosses South Carolina and Georgia. But bridge damage and major flooding has kept CSX's Blue Ridge subdivision out of service. A portion of the line running from Erwin, Tennessee, to Spartanburg, South Carolina, has been cleared, but CSX said "a long-term outage" is expected for other parts of the rail line. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Lower Mississippi draught restrictions eased

24/09/30

Lower Mississippi draught restrictions eased

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