Diesel spot trading sees slight recovery, while jet fuel premium continues to decline

⑴ Diesel market activity in Asia saw a slight uptick on Tuesday, with some spot selling resurfacing as several refineries continued to clear regular monthly quotas. ⑵ The East-West price spread widened to a discount of more than $190 per ton, keeping the regional arbitrage window closed. Refining profits remained steady at around $71 per barrel, while a slight increase in spot discounts reflected some loosening in window quotations. ⑶ For jet fuel, some September cargo offers appeared on the market, with the cash premium falling to $0.12 per barrel, hovering near a one-year low. The jet fuel and diesel price spread narrowed to a discount of about $0.60. ⑷ On the news front, attacks on Saudi energy facilities impacted some operations, while global diesel supply remains tight due to refining bottlenecks and the approach of seasonal demand. ⑸ Going forward, attention should focus on how Middle East geopolitical developments might disrupt product oil exports, and whether the East-West arbitrage window can reopen. If the regional supply-demand structure tightens further, there could be room for diesel crack spreads to recover.