The cash differential for the benchmark FOB Singapore 500 ppm sulfur gasoil grade rose 35 cents/b Monday to a discount of 50 cents/b to the Mean of Platts Singapore Gasoil assessment, its highest level in seven weeks.
The cash differential was last higher January 12 at a discount of 46 cents/b to MOPS Gasoil assessments.
Traders attributed the rise to strong buying interest, with Total taking out both BP and Winson's offers during the Platts Market on Close assessment process for gasoil Monday for cargoes loading over March 26-30 at discounts equivalent to 51 cents/b and 41 cents/b respectively to MOPS Gasoil assessments, after accounting for deemed pricing dates.
Total's outstanding bid for a cargo loading over March 17-21 also proved value at MOPS Gasoil minus 57 cents/b, after taking into account deemed pricing dates.
Market fundamentals in the Asia Pacific and Middle East remained stable and there was no clear reason for the uptick in demand, traders said.
"It seems more of a timing issue," said a middle distillates trader based in Singapore.
Market participants would be aiming to maximize storage space given the current contango structure, the trader added.
The front-month timespread for the 500 Singapore gasoil swap has fluctuated in a narrow range for the past two weeks and on Monday settled at minus 69 cents/b, 3 cents/b wider than last Friday.
Inventory levels in Singapore remain steady despite reduced exports from North Asia due to refinery turnarounds in Taiwan, South Korea and China as a flow of cargoes from India and the Persian Gulf compensate for the shortfall.
"Supply levels are still quite stable ... it doesn't seem like there's much change," said a second trader based in Singapore.
Market sources were uncertain if the demand rebound would be sustainable. "I think the market is more in wait-and-see mode," a trader said.
