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Asia Distillates-Gasoil cracks rise as supplies tighten; demand worries linger

Asian refining margins for 10 ppm gasoil rose on Friday, posting a weekly gain on tightening supplies as some regional refiners have cut run rates to combat fragile demand recovery in the wake of a resurgence in coronavirus infections.

Refining margins or cracks for gasoil with 10-ppm sulphur content rose 34 cents to $6.82 a barrel over Dubai crude during Asian trading hours. The cracks climbed 4.3% this week, the biggest gain in four weeks, Refinitiv Eikon data showed.

Average refinery run rates in Japan have slipped in the last two weeks, data from Petroleum Association of Japan (PAJ) showed, while market watchers said some refiners in South Korea and Taiwan are also running at lower rates.

Middle distillate inventories in Singapore have dropped to 13.4 million barrels this week, the lowest level in over three months.

Traders, however, remain concerned that demand in the short term will not be sufficient enough to absorb the adequate supplies still available in the region as several countries, including India, are stepping up lockdown measures due to surging new COVID-19 cases.

India’s gasoil exports this month are expected to close at about 2 million tonnes, up from 1.8 million tonnes in June, while July gasoil exports from China are expected to be higher than last month’s 856,000 tonnes, Refinitiv oil research assessments showed.

Cash premiums for 10-ppm gasoil GO10-SIN-DIF were at 76 cents a barrel to Singapore quotes on Friday, down from 81 cents a day earlier.

– Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub STK-GO-ARA rose 1.5% to 2.7 million tonnes in the week to July 16, data from Dutch consultancy Insights Global showed.

– The data showed ARA jet fuel inventories STK-JET-ARA rose 0.6% to 976,000 tonnes, the highest on record according to data that goes back to 2003.

– Sri Lanka’s Ceylon Petroleum Corp (Ceypetco) is seeking gasoil cargoes for deliveries to Dolphin Tanker Berth and SPM Muthurajawela, Colombo on a DAP basis via three separate term tenders.
BUY: 500ppm gasoil 1,680KB Nov. 1, 2020-June 30, 2021 Aug. 18 (90 Days)
BUY: 500ppm gasoil 1,120KB Oct. 15, 2020-June 14, 2021 Aug. 4 (90 Days)
BUY: 500ppm gasoil 1,365KB Oct. 15, 2020-June 14, 2021 Aug. 4 (90 Days)
BUY: 10ppm gasoil 315KB Oct. 15, 2020-June 14, 2021 Aug. 4 (90 Days)

– Two gasoil deals, no jet fuel trades

 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               48.15    -0.05      -0.10       48.20  GO-SIN
 GO 0.5 Diff                     -0.91     0.02      -2.15       -0.93  GO-SIN-DIF
 Spot Gas Oil 0.25%              48.79    -0.05      -0.10       48.84  GO25-SIN
 GO 0.25 Diff                    -0.27     0.02      -6.90       -0.29  GO25-SIN-DIF
 Spot Gas Oil 0.05%              49.60    -0.05      -0.10       49.65  GO005-SIN
 GO 0.05 Diff                     0.54     0.02       3.85        0.52  GO005-SIN-DIF
 Spot Gas Oil 0.001%             49.82    -0.12      -0.24       49.94  GO10-SIN
 GO 0.001 Diff                    0.76    -0.05      -6.17        0.81  GO10-SIN-DIF
 Spot Jet/Kero                   44.06     0.01       0.02       44.05  JET-SIN
 Jet/Kero Diff                   -0.36     0.01      -2.70       -0.37  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

Source: Reuters (Reporting by Koustav Samanta; Editing by Rashmi Aich)

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