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Lower Premiums for Diesel Term Deals from Asia Refiners in 2024

DIESEL

Some Asian refiners are set to agree diesel export deals at lower premiums in 2024 than last year according to Reuters sources. The lower premiums are driven by rising global supply next year and slower global demand growth.

  • Deals for 10ppm sulphur diesel from refiners GS Caltex and SK Energy in South Korea are likely at premiums between 0.5$/bbl and 0.6$/bbl to Singapore quotes down from premiums of 1$/bbl to 1.50$/bbl in 2023.
  • Formosa Petrochemical Corp last month sold at least one 750kbbl cargo per month to Vitol at a premium of between 0.8$/bbl and 1$/bbl.
  • The average spot premium below 1.5$/bbl in 2023 and lower than term premiums is also discouraging higher premiums for term supply.
  • Diesel accounts for 45% to 60% of refined fuel exports from the region so falling premiums could weigh on refining profits according to FGE.

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