Premiums for South Korean kerosene cargoes have surged this winter as cold weather finally draws down hefty north Asian inventories, traders said.

They said premiums for medium-range kerosene cargoes from South Korea are now talked at $8 a barrel premium to spot Singapore quotes, double the $4 premium earlier this month.
Traders said the recent cold snaps in Northeast Asia have eroded kerosene inventories in Japan, increasing the world’s third-biggest oil consumer’s need for heating fuel.
The latest industry data showed that Japanese kerosene stocks were almost 12 per cent below last year's level, and traders expect inventories will draw further as temperatures in most areas of Japan linger below normal.
Traders also said the cold snaps have dried up export supplies from South Korean refiners, who have been called upon to produce more for their own domestic market.
“It will be very difficult to procure kerosene supplies from South Korean refiners until February loading barrels,” said a Seoul-based trader.
Most South Korean refiners plan to keep their January crude runs at high level, but the rise in output may be just enough to meet domestic demand, traders said.
They said some western traders who had leased storage facilities in South Korea have some supplies left, but the barrels held by the traders are limited.