July 29, 2020 / 10:32 AM / 14 days ago

Asia Distillates-Gasoil cash premiums drop as supplies bulge

    SINGAPORE, July 29 (Reuters) - Asia's cash premiums for 10 ppm gasoil on Wednesday plunged
to their lowest in more than seven weeks, as concern mounted over a surge in near term supplies
and resurgent coronavirus cases are expected to cut industrial demand.
    Cash premiums for gasoil with 10 ppm sulphur content GO10-SIN-DIF slipped to 20 cents a
barrel to Singapore quotes, the lowest since June 8. They were at a premium of 27 cents per
barrel a day earlier.
    Gasoil exports from China CNC-DIESEL-EXP could jump by at least 15% in July to between 1.2
million and 1.3 million tonnes (290,000-315,000 bpd) from June, estimates from Refinitiv Oil
Research and FGE respectively showed.
    But export volumes from the third-biggest gasoil exporter in Asia would also depend on the
overall demand situation in the region, industry analysts said.
    "Where China's fuel exports go from here really depends on how fast and how effective
economic activity and demand across the rest of Asia begin to re-emerge from COVID-19 related
disruptions," said Peter Lee, senior oil and gas analyst at Fitch Solutions.
    "While China appears to be on its way to a V-shaped recovery following damaging lockdowns in
the first quarter, this is largely out of synch with the rest of the region as many countries
are still seeing rising infection rates and remain under full or partial lockdowns."
    Market watchers expect India's gasoil exports to also rise this month as the ongoing monsoon
season typically hurts domestic demand in the country, which is currently under extended
coronavirus-related lockdowns in many states.
    Refining margins, also known as cracks, for 10 ppm gasoil dropped to $6.76 a
barrel over Dubai crude during Asian trading hours on Wednesday, down from $6.97 a barrel on
Tuesday.
    
    INVENTORIES
    - Middle-distillate inventories in the Fujairah Oil Industry Zone rose 11.4% to 4.4 million
barrels in the week ended July 27, data via S&P Global Platts showed.
    - The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared
with a weekly average of 2.4 million barrels in 2019, Reuters calculations showed.
    - Meanwhile, U.S. distillate fuel inventories rose by 187,000 barrels, compared with
expectations for a draw of 267,000 barrels, data from industry group the American Petroleum
Institute (API) showed on Tuesday.
    
    SINGAPORE CASH DEALS
    - One jet fuel trade, no gasoil deals 
    
    OTHER NEWS
    - The family that owns beleaguered Singaporean oil trader Hin Leong Trading (HLT) is seeking
to block creditor OCBC's request to appoint overseers for the family's Xihe Holdings and four
other subsidiaries to recoup its debt.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               48.94    -0.06      -0.12       49.00  GO-SIN
 GO 0.5 Diff                     -0.92     0.01      -1.08       -0.93  GO-SIN-DIF
 Spot Gas Oil 0.25%              49.58    -0.06      -0.12       49.64  GO25-SIN
 GO 0.25 Diff                    -0.28     0.01      -3.45       -0.29  GO25-SIN-DIF
 Spot Gas Oil 0.05%              50.01    -0.14      -0.28       50.15  GO005-SIN
 GO 0.05 Diff                     0.15    -0.07     -31.82        0.22  GO005-SIN-DIF
 Spot Gas Oil 0.001%             50.06    -0.13      -0.26       50.19  GO10-SIN
 GO 0.001 Diff                    0.20    -0.07     -25.93        0.27  GO10-SIN-DIF
 Spot Jet/Kero                   44.59    -0.44      -0.98       45.03  JET-SIN
 Jet/Kero Diff                   -0.40    -0.11      37.93       -0.29  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 Barbara Lewis)
  
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