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Asia Distillates-Gasoil refining margins dip, demand remains muted

CommoditiesDec 10, 2018 17:10
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© Reuters. Asia Distillates-Gasoil refining margins dip, demand remains muted

SINGAPORE, Dec 10 (Reuters) - Asian refining margins for 10ppm gasoil eased on Monday as crude prices rose, while lack of strong seasonal demand for the industrial and transportation fuel kept the cash market at wide discounts.

Refining margins, also known as cracks, for gasoil with 10ppm sulphur content GO10SGCKMc1 slipped to $14.25 a barrel over Dubai crude during Asian trading hours, from $14.75 a barrel on Friday.

The margins have shed about 25 percent in the last four weeks, having touched a four-year peak of $18.92 a barrel on Nov. 15.

The middle distillates are not going as per expectations for winter demand, but they have not lost ground completely, trade sources said.

Typically, the fourth quarter is peak demand season for middle distillates, a group of oil products including diesel used in agriculture, industrial and power sectors.

"There's a bit of oversupply. Despite refinery maintenance and other issues, there was no shortage of diesel, so no imports were planned. We have sufficient product available within the country (in India) to match our requirements," a Mumbai-based trader said.

Meanwhile, about seven to nine long-range tankers carrying about 5 to 7 million barrels of diesel fuel are floating off Taiwan and Southeast Asian waters as a steep fall in oil prices meant buyers pulled back hoping for more declines, trade and shipping sources said on Friday. differentials for 10ppm gasoil GO10-SIN-DIF were at a discount of 60 cents a barrel to Singapore quotes on Monday.

They were at a discount of 65 cents a barrel on Friday, their weakest on record since Singapore's benchmark gasoil was shifted to 10ppm gasoil in January this year from 500ppm gasoil previously.

Gasoil cash differentials are also taking a beating as the prompt-month spread remains in contango.

In a contango market structure, prompt prices are lower than those for future delivery, which tends to encourage holders of physical barrels to store the product and sell it later to secure higher prices.

Cash discounts for jet fuel JET-SIN-DIF were at $1.06 a barrel to Singapore quotes on Monday, as against a discount of $1.10 a barrel on Friday.

Jet cracks JETSGCKMc1 fell to $15.54 a barrel over Dubai crude on Monday, from $16.03 a barrel in the previous session.

SINGAPORE CASH DEALS

- One gasoil deal, no jet fuel trades.

- Singapore trader Hin Leong sold 150,000 barrels of 10ppm gasoil to Gunvor for Dec. 25-29 loading at a discount of 50 cents a barrel to the balance of December Singapore quotes.

- For more information, please click O/AS

OTHER NEWS

- Brent crude oil futures rose on Monday after producer club OPEC and some non-affiliated suppliers last Friday agreed to a supply cut from January. Despite this, the price outlook for next year remains muted on the back of an economic slowdown. O/R

- Iranian President Hassan Rouhani said on Sunday a decision by OPEC and other oil producers on Friday to cut output was a rebuff for a U.S. "policy of meddling", the state news agency IRNA reported. OPEC and its Russia-led allies agreed on Friday to slash oil production by more than the market had expected despite pressure from U.S. President Donald Trump to reduce the price of crude. The key concept in the wake of the decision to reduce crude oil output by OPEC and its allies is "balance". It's something everybody in the market says they want, but they all have different ideas of what it means and how to get there. MID-DISTILLATES

CASH ($/T)

ASIA CLOSE

Change % Change

Prev Close RIC Spot Gas Oil 0.5%

70.86

1.73

2.50

69.13 GO-SIN GO 0.5 Diff

-3.09

0.01

-0.32

-3.10 GO-SIN-DIF Spot Gas Oil 0.25%

71.76

1.53

2.18

70.23 GO25-SIN GO 0.25 Diff

-2.19

-0.19

9.50

-2.00 GO25-SIN-DIF Spot Gas Oil 0.05%

72.44

1.53

2.16

70.91 GO005-SIN GO 0.05 Diff

-1.51

-0.19

14.39

-1.32 GO005-SIN-DIF Spot Gas Oil 0.001%

73.35

1.77

2.47

71.58 GO10-SIN GO 0.001 Diff

-0.60

0.05

-7.69

-0.65 GO10-SIN-DIF Spot Jet/Kero

73.94

1.71

2.37

72.23 JET-SIN Jet/Kero Diff

-1.06

0.04

-3.64

-1.10 JET-SIN-DIF

For a list of derivatives prices, including margins, please double

click the RICs below.

Brent M1

BRENTSGMc1

Gasoil M1

GOSGSWMc1

Gasoil M1/M2

GOSGSPDMc1

Gasoil M2

GOSGSWMc2

Regrade M1

JETREGSGMc1

Regrade M2

JETREGSGMc2

Jet M1

JETSGSWMc1

Jet M1/M2

JETSGSPDMc1

Jet M2

JETSGSWMc2

Gasoil 500ppm-Dubai

GOSGCKMc1

Cracks M1

Gasoil 500ppm-Dubai

GOSGCKMc2

Cracks M2

Jet Cracks M1

JETSGCKMc1

Jet Cracks M2

JETSGCKMc2

East-West M1

LGOAEFSMc1

East-West M2

LGOAEFSMc2

LGO M1

LGOAMc1

LGO M1/M2

LGOASPDMc1

LGO M2

LGOAMc2

Crack LGO-Brent M1

LGOACKMc1

Crack LGO-Brent M2

LGOACKMc2

Asia Distillates-Gasoil refining margins dip, demand remains muted
 

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