May 19, 2020 / 10:47 AM / 7 days ago

Asia Distillates-Gasoil cracks climb to strongest in over two weeks

    SINGAPORE, May 19 (Reuters) - Asian refining margins for 10 ppm gasoil climbed to their
strongest in over two weeks on Tuesday as refinery run cuts helped rein in abundant supplies,
while traders were hopeful there would be a gradual uptick in demand as coronavirus containment
measures ease in the region.
    Refining margins or cracks for gasoil with 10 ppm sulphur content climbed to
$5.23 a barrel over Dubai crude during Asian trade, the highest level since April 30. They were
at $4.93 per barrel a day earlier.
    Cash discounts for 10 ppm gasoil GO10-SIN-DIF narrowed to 95 cents per barrel to Singapore
quotes on Tuesday, as against a discount of $1.06 per barrel on Monday.
    The exchange of futures for swaps (EFS), which determines the gasoil price spread between
Singapore and Northwest Europe, has widened to about minus $15 a tonne this week
from around minus $2 per tonne two weeks ago, Refinitiv data showed.
    A Singapore-based middle distillates trader said it seems on paper the East-West gasoil arb
was opening but it is a bit early to suggest if this would be the beginning of a trend.
    A record volume of diesel, however, is set to reach Europe from the East in May after
lockdown measures due to coronavirus left refiners in Asia and the Middle East with huge excess
volumes of fuel.
    Over 3 million tonnes of diesel are set to arrive in Europe in May, up from a previous
record of 2.8 million tonnes in June last year, according to Refinitiv data.
    The sharp rise in fuel exports from Asia comes after China's refineries cranked up
operations in April after lockdown measures were eased.
    Meanwhile, refining margins for jet fuel flipped to a premium of $1.83 a barrel
over Dubai crude on Tuesday, compared with a discount of 87 cents per barrel on Monday.
    Cash discounts for jet fuel JET-SIN-DIF were at $2.25 a barrel to Singapore quotes on
Tuesday, compared with a Monday's discount of $2.09 a barrel.
    
    INDIA'S FUEL DEMAND RECOVERY GATHERS PACE
    - A recovery in fuel demand in India gathered momentum in the first half of May versus April
as curbs on transport and industrial activity were partly lifted in areas that have contained
the spread of coronavirus, data from industry sources showed.
    - Demand for refined fuel is expected to get another boost from Monday as India has lifted
more restrictions under its extended lockdown that runs until May 31. 
    - State companies' sale of gasoil fell about 38% to 1.93 million tonnes in the first half of
May from a year earlier. In April, they had fallen by an average of 57%. In the first half of
April, the refiners sold 1.1 million tonnes of gasoil.
    
    SINGAPORE CASH DEALS
    - One jet fuel trade, no gasoil deals
    - For more information, click
    
    OTHER NEWS
    - OPEC+ has cut its oil exports sharply in the first half of May, companies that track the
shipments said, suggesting a strong start in complying with a new production cut agreement.

    - Oil prices rose slightly on Tuesday amid signs that producers are cutting output as
promised just as demand picks up, stoked by more countries easing out of curbs imposed to
counter the coronavirus pandemic.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                          
 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                 35.96     1.12       3.21       34.84  GO-SIN
 GO 0.5 Diff                       -4.23    -0.03       0.71       -4.20  GO-SIN-DIF
 Spot Gas Oil 0.25%                36.64     1.12       3.15       35.52  GO25-SIN
 GO 0.25 Diff                      -3.55    -0.03       0.85       -3.52  GO25-SIN-DIF
 Spot Gas Oil 0.05%                36.70     1.12       3.15       35.58  GO005-SIN
 GO 0.05 Diff                      -3.49    -0.03       0.87       -3.46  GO005-SIN-DIF
 Spot Gas Oil 0.001%               39.24     1.26       3.32       37.98  GO10-SIN
 GO 0.001 Diff                     -0.95     0.11     -10.38       -1.06  GO10-SIN-DIF
 Spot Jet/Kero                     34.42     3.50      11.32       30.92  JET-SIN
 Jet/Kero Diff                     -2.25    -0.16       7.66       -2.09  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 Ramakrishnan M.)
  
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