Asia Distillates-Gasoil cracks dip to 2-week low as virus resurgence hits demand
Asian refining margins for 10 ppm gasoil slipped to a two-week low on Wednesday, weighed down by concerns over subdued demand in the wake of renewed coronavirus lockdowns, while the region remains awash with supplies.
Refining margins, also known as cracks, for gasoil with 10-ppm sulphur content dropped 35 cents to $6.24 a barrel over Dubai crude during Asian trading hours, the lowest since the end of June.
Gasoil demand would come under pressure as industrial activity takes a hit with a second wave of COVID-19 infections in many places, a Singapore-based trader said.
“But I think the pick-up in demand, if any, would still be faster than jet fuel, all other things staying equal,” she added.
Jet fuel cracks, which have been the hardest hit among oil products as global airlines struggle to survive their worst downturn, are currently at their weakest seasonal levels for this time of the year.
Refining margins for the aviation fuel in Singapore were down 21 cents at $1.20 a barrel over Dubai crude on Wednesday.
Cash discounts for jet fuel JET-SIN-DIF widened by a cent to 30 cents a barrel to Singapore quotes on Wednesday, while cash premiums for 10-ppm gasoil GO10-SIN-DIF dipped to 71 cents a barrel to Singapore quotes, down 2 cents from a day earlier.
INVENTORIES
– Middle-distillate inventories in the Fujairah Oil Industry Zone climbed 11.8% to 4.3 million barrels in the week ended July 13, data via S&P Global Platts showed.
– The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared with a weekly average of 2.4 million barrels in 2019, Reuters calculations showed.
– Meanwhile, U.S. distillate fuel inventories rose by 3 million barrels, compared with expectations for a gain of 1.5 million barrels, data from industry group the American Petroleum Institute (API) showed on Tuesday.
SINGAPORE CASH DEALS
– One gasoil deal, no jet fuel trades
ASSESSMENTS MID-DISTILLATES CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Spot Gas Oil 0.5% 48.84 0.99 2.07 47.85 GO-SIN GO 0.5 Diff -0.82 -0.02 2.50 -0.80 GO-SIN-DIF Spot Gas Oil 0.25% 49.48 0.99 2.04 48.49 GO25-SIN GO 0.25 Diff -0.18 -0.02 12.50 -0.16 GO25-SIN-DIF Spot Gas Oil 0.05% 50.17 0.99 2.01 49.18 GO005-SIN GO 0.05 Diff 0.51 -0.02 -3.77 0.53 GO005-SIN-DIF Spot Gas Oil 0.001% 50.36 0.98 1.98 49.38 GO10-SIN GO 0.001 Diff 0.71 -0.02 -2.74 0.73 GO10-SIN-DIF Spot Jet/Kero 43.92 1.18 2.76 42.74 JET-SIN Jet/Kero Diff -0.30 -0.01 3.45 -0.29 JET-SIN-DIF Brent M1 Gasoil M1 Gasoil M1/M2 Gasoil M2 Regrade M1 Regrade M2 Jet M1 Jet M1/M2 Jet M2 Gasoil 500ppm-Dubai Cracks M1 Gasoil 500ppm-Dubai Cracks M2 Jet Cracks M1 Jet Cracks M2 East-West M1 East-West M2 LGO M1 LGO M1/M2 LGO M2 Crack LGO-Brent M1 Crack LGO-Brent M2
Source: Reuters (Reporting by Koustav Samanta; editing by Emelia Sithole-Matarise)