May 30, 2012 / 12:22 PM / 5 years ago

Asia Distillates-Gasoil margins at 17-month low

SINGAPORE, May 30 (Reuters) - Asian gasoil margins dived to
a nearly 1 1/2 year low on Wednesday as supply increased from
North Asia and demand remained lacklustre in the region.	
    The gasoil June crack fell 43 cents to $14.18 a barrel above
Dubai crude, the lowest since Dec. 29, 2010 when it was at
$14.16, Reuters data showed. 	
    Gasoil demand from Indonesia, Asia's top buyer, is expected
to drop by up to 25 percent in June from May on the return of
the Balongan oil refinery and lower domestic demand.	
    Diesel inventories in Japan increased by 2.56 percent on the
week to 2.15 million kilolitres (13.5 million barrels) in the
week ended May 26, while exports increased by nearly 5 percent,
data from the Petroleum Association of Japan showed. 	
    But the average refinery run rate has decreased to 64
percent from 68.4 percent, which could curb increased output of
middle distillates and help to support prices again, traders
said.	
    South Asian demand for gasoil, however, remained robust with
Bangladesh Petroleum Corp (BPC) and Pakistan State Oil 
set to pay higher premiums in recent tenders.	
    BPC has finalised its gasoil contract for the second half of
the year at a premium of $3.80 per barrel over Middle East
quotes, up nearly 10 percent from the $3.50 per barrel premium
for its January-June contract, and up 15 percent from the same
period last year. 	
   The term contract for jet fuel has been fixed at a premium of
$4.80 per barrel over Middle East quotes, up from the current
$4.50 per barrel, and from $4.30 per barrel over the same period
last year.  	
    PSO is set to buy two 0.5 percent sulphur gasoil cargoes of
55,000 tonnes each from Vitol and Glencore at premiums of $5.69
and $4.88 a barrel over Middle East quotes respectively, its
first spot purchase in more than a year. 	
   The tender closed on May 29 and is valid until June 2.  	
    Peak summer demand in the Middle East for the power
generation fuel is keeping Middle East-linked quotes supported,
traders said.	
    In the jet fuel market, ExxonMobil has offered 35,000 tonnes
of jet fuel for loading from its joint venture Samref refinery
in Yanbu over June 29 to July 1 in a tender that closes on May
31, with same-day validity.  	
    If the tender is awarded, the cargo is likely to remain
within the Middle East to capitalise on air travel growth in the
region, or be sent to the Mediterranean ahead of summer demand,
traders said.  	
   "It's much cheaper to send the cargoes from Yanbu to the west
than from the Gulf to the west, so the buyer will have a big
freight advantage," a Gulf-based trader said, adding that the
tender will likely attract high premiums.  
 	
    	
    * TENDERS: Turkey's Tupras is seeking 30,000 tonnes of jet
fuel for June 1-15 in a tender that closes on May 30, with
same-day validity.	
    - ExxonMobil has offered 35,000 tonnes of jet fuel for
loading over June 29-July 1 from Yanbu. The tender closes on May
31, with same-day validity.	
    	
    * CASH DEALS: No jet deals, one gasoil trade. 	
    - BP bought 150,000 barrels of 0.5 percent sulphur gasoil
for loading over June 23-27 from SK Energy at parity to
Singapore quotes.    	
 	
 MID-DISTILLATES                                                                   
 CASH ($/T)          ASIA CLOSE       Change   % Change   Prev     RIC
                                                          Close    
 Spot Gas Oil 0.5%            117.22    -2.27      -1.90   119.49  GO-SIN
 GO 0.5 Diff                    0.00     0.04    -100.00    -0.04  GO-SIN-DIF
 Spot Gas Oil 0.25%           118.47    -2.36      -1.95   120.83  GO25-SIN
 GO 0.25 Diff                   1.25    -0.05      -3.85     1.30  GO25-SIN-DIF
 Spot Gas Oil 0.05%           119.42    -2.36      -1.94   121.78  GO005-SIN
 GO 0.05 Diff                   2.20    -0.05      -2.22     2.25  GO005-SIN-DIF
 Spot Gas Oil                 120.37    -2.31      -1.88   122.68  GO10-SIN
 0.001%                                                            
 GO 0.001 Diff                  3.15     0.00       0.00     3.15  GO10-SIN-DIF
 Spot Jet/Kero                118.24    -2.44      -2.02   120.68  JET-SIN
 Jet/Kero Diff                 -0.25     0.00       0.00    -0.25  JET-SIN-DIF
                                                                                   
 SWAPS  ($/T)        ASIA CLOSE       Change   % Change   Prev     PM (1130 GMT)
                     (0830 GMT)                           Close    
 Brent M1                     105.60    -2.11      -1.96   107.71              
 Gasoil M1                    117.19    -2.31      -1.93   119.50             
 Gasoil M1/M2                  -0.15     0.02     -11.76    -0.17              
 Gasoil M2                    117.34    -2.33      -1.95   119.67             
 Regrade M1                     1.26    -0.14     -10.00     1.40               
 Regrade M2                     1.29    -0.09      -6.52     1.38               
 Jet M1                       118.45    -2.45      -2.03   120.90              
 Jet M1/M2                     -0.18    -0.03      20.00    -0.15               
 Jet M2                       118.63    -2.42      -2.00   121.05              
 Gasoil 0.5%-Dubai             14.18    -0.43      -2.94    14.61             
 Cracks M1                                                         
 Gasoil 0.5%-Dubai             15.01    -0.37      -2.41    15.38             
 Cracks M2                                                         
 Jet Cracks M1                 15.44    -0.57      -3.56    16.01              
 Jet Cracks M2                 16.30    -0.46      -2.74    16.76              
 East-West M1                 -22.43    -1.20       5.65   -21.23              
 East-West M2                 -17.19    -1.23       7.71   -15.96              
 LGO M1                       895.50   -16.00      -1.76   911.50           
 LGO M1/M2                      4.13     0.13       3.25     4.00              
 LGO M2                       891.38   -16.12      -1.78   907.50           
 Crack LGO-Brent M1            14.05    -0.05      -0.35    14.10             
 Crack LGO-Brent M2            14.26     1.90      15.37    12.36             
   	
	
 (Reporting by Jessica Jaganathan; editing by James Jukwey)

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