Asian gas oil prices rise on RI buying

Asian gas oil prices rise on RI buying

SINGAPORE (Reuter): Gas oil prices edged higher yesterday supported by indications of further Indonesian buying, while a flurry of jet offers were made in the face of no buyers.

A European major sold 150,000 barrels of Oct.7-11 gas oil to a Pertamina affiliate at $23.85 per barrel, up from a similar trade on Friday for Oct. 4-8 at $23.60.

The major just pipped a Singapore trader to the post. The trader was offering a similar cargo for the same time frame at $23.95 per barrel.

Gas oil sellers are likely to continue to edge prices higher this week in a bid to test Indonesia's appetite for the product and to offload generally high stocks in the region.

Traders estimated that Pertamina may have bought three cargoes on Friday.

Indonesia has been a supporting factor for gas oil for some weeks as it covers an expected shortfall owing to refinery maintenance schedules at Cilacap.

Cilacap 100,000 barrels-per-day (bpd) CDU number 1 is due to return to operation from maintenance on Sept. 23/24 and the 200,000-bpd CDU 2 will shut down mid October for maintenance.

October gas oil swaps held steady at $23.95/$24.00 per barrel and traders said swaps were likely to be well supported.

A handful of jet offers hit the market, mostly dated in the first half of October, although one offer stretched to Oct. 18- 22.

Traders said no serious buyers emerged, leaving the sellers floundering. On a Singapore quotes basis, the offers stayed around -30 to -40 cents, traders said.

Traders said the flurry of offers reflected a similar flurry last week, which also found no buyers.

A mild winter outlook and high stocks continue to keep potential buyers feeling comfortable.

But the weakness of the jet market pushed out the October regrade to -60 cents bid, although the latest quote was -55/-35 cents, traders said.