UPDATE 1-SK Energy cuts Sept diesel exports; runs steady
(Adds details, quotes)
SINGAPORE, Aug 26 (Reuters) - South Korea's top refiner SK Energy (096770.KS) will cut gas oil exports to 80,000 tonnes in September from 120,000 tonnes in August, a trade source familiar with the matter said on Tuesday.
The refiner will also keep September crude runs steady at 750,000 barrels per day (bpd), having trimmed rates from 780,000-790,000 bpd earlier due to weak margins, he added.
"The refiner has to cover term commitments so the spot availabilities are slightly lower," said the source.
But the overall Asian middle distillates market was awash in supply with stocks hovering at just over 5-year high levels last week at 11.58 million barrels.
SK sold the 0.25 percent gas oil cargo at a deep discount of $1.50 a barrel to Singapore quotes on a free-on-board (FOB) South Korean basis, and has another cargo to sell in the spot market.
"Demand is poor in Asia," a second trader said.
Besides a lack of demand from China, Vietnam is also facing a supply glut in the domestic market.
Reflecting bearish sentiment, gas oil's September/October swaps contango was pegged at a steep $2.20 a barrel. <SWAPS/SG1> (Reporting by Felicia Loo; Editing by Louise Heavens)
