South Korean oil majors to sell more diesel for June than May, sources say (updated)

S-Oil

21/05/2024 09:39

(Updates number of cargoes and adds tender detail, paragraphs
2,4)
    By Trixie Yap
       SINGAPORE, May 21 (Reuters) - Major South Korean oil
companies are expected to sell more spot 10ppm sulphur diesel
for June than in May despite reduced refinery runs because of
planned maintenance and slight rate cuts announced previously,
trade sources said.
    Refiners such as GS Caltex, SK Innovation  096770.KS 
subsidiary SK Energy and S-Oil have offered at least 17 cargoes
ranging between 300,000 and 450,000 barrels since mid-May,
according to tender documents seen by Reuters and trade sources.
    The volume is slightly higher than May shipments of up to 13
cargoes and stable from the 17 cargoes in April, though most
were sold at discounts of more than $1 a barrel, records showed.
These cargoes are in addition to at least three 500ppm sulphur
diesel cargoes already sold for June.
    GS Caltex on Tuesday offered two more 10ppm sulphur diesel
cargoes for loading June 3-7 and June 26-30 in a tender that
closes on May 23 with same-day validity, trade sources said. 
    The ample regional spot supplies have surprised markets,
given earlier expectations of tightening availability, and are
likely to weigh on spot differentials and refining margins in
the near-term, three regional trade sources said on Tuesday.
    Reuters had reported that one of SK Energy's crude units was
expected to be shut for a few days of routine maintenance while
GS Caltex's May average refinery runs have fallen by
20,000-30,000 barrels per day on planned rate cuts. Hyundai
Oilbank is also recovering from a minor production setback last
week. 
    The ready offers signal that there is still economic benefit
to refiners continuing to capitalise on positive diesel
production margins despite weaker refinery margins overall, one
Singapore-based trade source said.
    "Diesel is still the best performing among all of the fuel
products coming out of a refinery," a second source said.  
    Diesel refining margins  GO10SGCKMc1  are little changed
around $14 to $15 a barrel, Eikon pricing data shows.
    Singapore complex refining margins  DUB-SIN-REF  fell to an
eight-month low around $2.28 last week.     

 (Reporting by Trixie Yap
Editing by Subhranshu Sahu and David Goodman)
 ((trixie.yap@thomsonreuters.com;))