Asian diesel monthly spreads weaken as spot trading remains sluggish

⑴ Asian diesel prompt spreads softened on Tuesday, following the decline in ICE gasoline futures, with trading in the spot window remaining subdued. ⑵ The market focus is still on the easing of supply tightness concerns, as refineries in the region continue spot sales for cargoes in October and November. ⑶ The East-West spread narrowed for a second consecutive trading day, closing at a discount of about $155 to $160 per ton. ⑷ The diesel crack spread rebounded by around $3 from the previous trading day, reaching roughly $63 per barrel. ⑸ The cash spread fell to about $1.8 per barrel, reflecting softer spreads for October-November and lower offers in the trading window. ⑹ Reports indicate that some jet fuel cargoes were traded at premiums of $1 to $2 per barrel earlier this week, though details have not been confirmed. ⑺ The arbitrage window between Asia and Europe or the US remains open, but October shipments along these two routes are still rare. ⑻ The jet fuel versus diesel spread remains at a wide premium of around $2 per barrel. ⑼ In Singapore's cash trading, neither jet fuel nor diesel saw any deals. ⑽ On the inventory side, surveys show US crude inventories are expected to rise last week, while refined product inventories may decrease. ⑾ Refineries: due to the hurricane, US Gulf of Mexico producers shut down about 30% of current daily crude oil production and roughly 25% of natural gas output. ⑿ Additionally, Japan's Cabinet on Tuesday approved three bills to strengthen energy supply security, including measures to offset higher costs of importing crude oil bypassing the Strait of Hormuz.