Asia Distillates-Gasoil refining margins gain on tighter supplies

Asian refining margins for 10 ppm gasoil rose for a second consecutive session on Friday as seasonal refinery turnarounds have tightened supplies, although regional demand continues to remain lacklustre due to COVID-19 restrictions.

Refining margins, also known as cracks, for 10 ppm gasoil rose to $8.70 per barrel over Dubai crude during
Asian trading hours, compared with $8.60 per barrel a day earlier.

Cracks for the benchmark gasoil grade in Singapore have gained about 26% in the last couple of months, Refinitiv Eikon data showed.

Despite limited arbitrage opportunities, the gasoil market would likely hold steady in the short term as export volumes from India as well as China are expected to remain low until refineries start ramping up rates, trade sources said.

Middle distillate inventories in Singapore have slumped to their lowest level in more than 16 months this week, Enterprise
Singapore data showed on Thursday.

Cash discounts for gasoil with 10 ppm sulphur content GO10-SIN-DIF widened by a cent to 11 cents per barrel to Singapore quotes on Friday.

CHINA’S TEAPOTS SNAP UP FUEL OIL

China’s independent refineries are snapping up fuel oil, resuming imports after a nearly five-year hiatus, as Beijing’s crackdown on crude oil quota trading along with new fuel taxes limit refinery feedstock options.

Five companies, including four refineries based in Shandong province and one local trader, booked 5.2 million barrels of fuel oil from Russia and the Middle East in recent few weeks for deliveries from late June through July, four traders and two refinery officials familiar with the transactions told Reuters.

ARA INVENTORIES

Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub STK-GO-ARA dropped 7.4% to 2.1 million tonnes in the week ended June 10, data from Dutch consultancy Insights Global showed.

ARA jet fuel inventories STK-JET-ARA dipped 2.1% this week to 1.1 million tonnes.

SINGAPORE CASH DEALS

No gasoil trades, no jet fuel deals

OTHER NEWS

Oil prices rose on Friday to fresh multi-year highs and were set for their third weekly jump on expectations of a recovery in fuel demand in Europe, China and the United States as rising vaccination rates lead to an easing of pandemic curbs.

ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                76.36     0.66       0.87        75.7  GO-SIN
 GO 0.5 Diff                      -2.36     0.09      -3.67       -2.45  GO-SIN-DIF
 Spot Gas Oil 0.25%               76.46     0.66       0.87        75.8  GO25-SIN
 GO 0.25 Diff                     -2.26     0.09      -3.83       -2.35  GO25-SIN-DIF
 Spot Gas Oil 0.05%               76.64     0.68       0.90       75.96  GO005-SIN
 GO 0.05 Diff                     -2.08     0.11      -5.02       -2.19  GO005-SIN-DIF
 Spot Gas Oil 0.001%              78.61     0.56       0.72       78.05  GO10-SIN
 GO 0.001 Diff                    -0.11    -0.01      10.00        -0.1  GO10-SIN-DIF
 Spot Jet/Kero                    75.91      0.5       0.66       75.41  JET-SIN
 Jet/Kero Diff                    -0.35     0.06     -14.63       -0.41  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)