Winson Oil, Unipec Snap up Gasoil Cargoes
Both traders buy over 12 million barrels in September.
Oil traders Winson Oil and Unipec have snapped up over 12 million barrels of gasoil in just under two weeks and are booking vessels in Singapore to either store the fuel or export it, shipping and trading sources said on Wednesday.
Winson Oil, based in Hong Kong and registered in Singapore, bought the bulk of the cargoes at over 9 million barrels in oil price agency S&P Global Platts' market since the start of September, trading data showed. Unipec, the trading arm of Chinese state oil major Sinopec, purchased the rest, the data showed.
The strong demand from both firms - 12 million barrels is equivalent to about two to three months of a major refinery's gasoil production - helped push up the Asian gasoil margin and cash differentials for the benchmark 500 parts-per-million (ppm) gasoil grade to nearly two-year highs, according to Reuters data. <GO005-SIN-DIF>
"Winson's buying will tighten the (market) fundamentals going forward as (trading) is centralised to a few players," said one Singapore-based middle distillates trader. The trader who was not authorised to speak with media and declined to be identified.
Winson Oil and Unipec did not respond to Reuters' calls seeking comments.
STORING FUEL
At least three to four long-range tankers have been chartered by Winson Oil to store gasoil for a period of two to three months in Asia, shipbrokers said.
Winson Oil has also bought a super-tanker, known in the trade as a very large crude carrier (VLCC), to store fuel off Singapore waters. The vessel is Winson Oil's second VLCC.
The firm has in recent years been stepping up its oil trading activities in Singapore, where its trading arm is based, routinely buying gasoil from Taiwan and South Korea and selling it as bunker fuel into North Asia.
Platts said in a report on Tuesday that the first week of September trading volumes for gasoil was the highest this year at over 10 million barrels, compared with about 26 million barrels for the whole of December last year.
Meanwhile, Unipec has chartered a newly built VLCC, Coshonour Lake, to load gasoil from Tianjin in northern China in the second half of September, likely to head to Europe, a person close to the matter said. The person spoke on condition of anonymity as he was not allowed to speak to media.
"(Unipec) is trying to charter another VLCC for loading in mid- or second-half October," the person added.
Gasoil margins are expected to trend higher in the fourth quarter as several refineries undergo both planned and unplanned maintenance, especially in gasoil-producing units, and as demand is expected to recover in several countries post-monsoon, traders said.
Reporting by Jessica Jaganathan
