MOSCOW (MRC) -- Asia's middle distillate markets firm on Friday, buoyed by a firming demand outlook and tighter regional supplies, said Hydrocarbonprocessing.
Recovering industrial demand due to easing COVID-19 restrictions and increased usage of the fuel for power generation on the back of high coal and gas prices are boosting the markets, trade sources said.
Rising natural gas and thermal coal prices are likely to see increased gas-to-oil switching, supporting demand for residual fuel oil and gasoil, ANZ Research said in a note.
ANZ analysts raised their fourth-quarter 2021 crude oil demand forecast by 450,000 bpd amid rising gas-to-oil switching in the power generation and industrial sectors and a continued recovery in demand for transportation fuels. The front-month gasoil time spread climbed to 72 cents a barrel, its highest since December 2019, Refinitiv data in Eikon showed.
Meanwhile, the front-month jet fuel crack firmed to USD12.32 a barrel over Dubai crude during Asian trading hours despite firming crude oil prices. The jet crack hit a near two-year high of USD13.50 a barrel on Wednesday.
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose 1% to 2.03 MM tons in the week ended Oct. 7, according to Dutch consultancy Insights Global.
The gasoil stockpiles, which hit a near 1-1/2 yr low in late-September, edged up slightly on the back of higher imports from the Middle East Gulf. ARA jet fuel inventories fell 6% this week to a near six-month low of 867,000 tons. Some jet fuel is being blended into winter-specification diesel, draining stocks. Jet coming from Russia, some product moving to Britain, some jet blended into winter spec diesel.
As per MRC, India is framing policies to promote the use of clean fuels, including electric vehicles (EVs), and tightening emission norms to meet its carbon reduction targets. India is the third-largest user of transport automobiles in the world but 70% of its transport energy need is fulfilled by importing fossil fuels.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.