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Asia Distillates-Gasoil refining margins hit 12-week high

Asian refining margins for 10ppm gasoil rose on Monday to their highest in 12 weeks, buoyed by tightening supply, while cash discounts for the industrial fuel widened marginally on the back of weaker buying interests in the physical market.

Refining margins or cracks for 10ppm gasoil climbed to $15.72 a barrel over Dubai crude during Asian trading hours, a fresh high since end-November.

The benchmark gasoil margins, which have increased about 19 percent since the beginning of this year, were at $15.27 a barrel on Friday.
The recent gains have pushed the cracks for the industrial fuel to their highest levels for this time of the year since 2015, Refinitiv Eikon data showed.

Depleting middle distillate inventories in Singapore over the past few weeks, combined with a play in the market could be contributing to the sense of bullishness in gasoil at the moment, said Sukrit Vijayakar, director of energy consultancy Trifecta.

Cash differentials for gasoil with 10ppm sulphur content GO10-SIN-DIF were at a discount to 37 cents a barrel to Singapore quotes, compared with a discount of 35 cents a barrel on Friday.

“The discounts are suggesting that the prompt market is slightly over-valued… For now though, gasoil appears pretty much balanced,” Vijayakar said. Meanwhile, cash discounts for jet fuel JET-SIN-DIF narrowed by a cent to 27 cents a barrel to Singapore quotes on Monday.

Jet fuel cracks rose to $14.67 a barrel over Dubai crude on Monday, up from $14.25 a barrel on Friday.

The physical market for jet fuel in the Singapore window remained muted with no bids or trades on Monday.

TENDERS
– Sri Lanka’s Ceylon Petroleum Corp (Ceypetco) is seeking a combined cargo of 150,000 barrels of 500ppm sulphur gasoil and 160,000 barrels of jet fuel for delivery to Dolphin Tanker Berth and SPM Muthurajawela, Colombo, over March 27-28 on a DAP basis.
The tender closes on Feb. 26 and will be valid for three days.

SINGAPORE CASH DEALS
– Four gasoil deals, no jet fuel trade.
– Winson Oil sold two separate cargoes of 150,000 barrels of 10ppm gasoil each to Trafigura for March 16-20 loading at a discount of 40 cents a barrel to March Singapore quotes.
– Vitol bought 163,000 barrels of 2500 ppm gasoil from Ocean Energy for March 5-9 loading at a discount of $2.60 a barrel to Singapore quotes.
– Singapore trader Hin Leong sold 165,000 barrels of 500ppm gasoil to Ocean Energy for March 10-14 loading at a discount of $1.20 a barrel to Singapore quotes.

OTHER NEWS
– China’s automobile sales in January fell 15.8 percent from a year earlier, the country’s top auto industry association said on Monday, marking the seventh straight month of declining sales in the world’s largest auto market.
– Indian Oil Corp, the country’s top refiner, has signed its first annual deal to buy up to 3 million tonnes or 60,000 barrels per day of U.S. oil, its chairman Sanjiv Singh said on Monday.
– Oil prices on Monday hit their highest levels since November last year, lifted by OPEC-led supply cuts, U.S. sanctions against Iran and Venezuela, and hopes that the Afro-American trade dispute may soon end.
– Saudi Arabia has signed an agreement to supply Pakistan with crude oil and petroleum products to secure its fuel needs, Saudi Energy Minister Khalid al-Falih said on Sunday on Twitter.

ASSESSMENTS
 MID-DISTILLATES                                                                            
 CASH ($/T)             ASIA CLOSE         Change   % Change    Prev Close   RIC
 Spot Gas Oil 0.5%                  79.39     2.13        2.76        77.26  GO-SIN
 GO 0.5 Diff                        -2.61    -0.01        0.38        -2.60  GO-SIN-DIF
 Spot Gas Oil 0.25%                 79.74     2.05        2.64        77.69  GO25-SIN
 GO 0.25 Diff                       -2.26    -0.09        4.15        -2.17  GO25-SIN-DIF
 Spot Gas Oil 0.05%                 80.62     2.21        2.82        78.41  GO005-SIN
 GO 0.05 Diff                       -1.38     0.07       -4.83        -1.45  GO005-SIN-DIF
 Spot Gas Oil 0.001%                81.63     2.12        2.67        79.51  GO10-SIN
 GO 0.001 Diff                      -0.37    -0.02        5.71        -0.35  GO10-SIN-DIF
 Spot Jet/Kero                      80.66     2.10        2.67        78.56  JET-SIN
 Jet/Kero Diff                      -0.27     0.01       -3.57        -0.28  JET-SIN-DIF
                                                                                            
 For a list of derivatives prices, including margins, please                                
 double click the RICs below.                                                
 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

 

(Reporting by Koustav Samanta; Editing by Rashmi Aich)

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