Gasoil cracks dip as supply continues to exceed demand
Asian refining margins for 10ppm gasoil slipped on Tuesday after hitting a more than five-week high in the previous session as the market remained awash with supplies on tepid demand.
Refining profit margins or cracks for gasoil with 10ppm sulphur content were at $15.06 barrel over Dubai crude during Asian trade. On Monday, the cracks hit $15.21 per barrel, the strongest since May 17.
The refining profit margins for the benchmark gasoil grade weakened despite a dip in raw material crude prices on Tuesday as supply was still exceeding demand, trade sources said.
The monsoon season is currently underway and heavy rainfall curbs the use of the transportation fuel in some parts of the region, a Singapore-based middle distillate trader said.
Crude oil prices fell on Tuesday amid concerns over the outlook for crude demand, but prices were supported after Washington announced new sanctions on Iran amid mounting tensions in the Middle East. [O/R]
Cash discounts for 10ppm gasoil widened to 6 cents a barrel to Singapore quotes, compared with a 3-cents discount per barrel on Monday.
The July/August time spread widened its contango structure by two cents to a discount of 17 cents a barrel on Tuesday.
In a contango market, prompt prices are lower than those for future delivery. This tends to encourage holders of physical barrels to store the product and sell later to secure higher prices.
Meanwhile, jet fuel cracks dipped to $14.62 a barrel over Dubai crude, compared with $14.71 a barrel on Monday.
Cash discounts for jet fuel narrowed by a cent to be at 10 cents a barrel to Singapore quotes on Tuesday.
The physical jet fuel market in Singapore remained muted with no bids or trades on Tuesday.
– India’s Mangalore Refinery and Petrochemicals Ltd (MRPL) has offered 40,000 tonnes of jet fuel for loading over July 20-22 from New Mangalore.
– MRPL was also offering 65,000 tonnes of HSD (high-speed diesel) for loading over July 12-14 from New Mangalore.
– Both the tenders close on June 27 and have the same-day validity.
SINGAPORE CASH DEALS
– No gasoil trades, no jet fuel deals
– A surge in India’s oil imports from the United States outpaced growth in shipments from its traditional suppliers in the Middle East, after Washington imposed sanctions on Tehran in November, according to tanker arrival data obtained from sources.
– Iranian crude exports have dropped so far in June to 300,000 barrels per day (bpd) or less after the United States tightened the screw on Tehran’s main source of income, industry sources said and tanker data showed, deepening global supply losses.
– In the opinion of Russian officials, the oil contamination crisis that disrupted flows from the world’s second-largest exporter of crude this spring is long over.
But a closer look at a dozen tankers containing dirty Russian oil suggests that for the buyers, the debacle has a long way to run and will cost them hundreds of millions of dollars.
Source: Reuters (Reporting by Koustav Samanta; Editing by Rashmi Aich)