June 30, 2020 / 10:36 AM / 12 days ago

Asia Distillates-Gasoil cracks drop to lowest in over two weeks

    SINGAPORE, June 30 (Reuters) - Asian refining margins for 10 ppm gasoil dropped for a third
consecutive session on Tuesday, weighed down by concerns of a new wave of coronavirus on demand
recovery, while refiners increase production, adding to an existing supply overhang in the
region.
    Refining margins or cracks for gasoil with 10-ppm sulphur content dropped 13
cents to $6.16 a barrel over Dubai crude during Asian trade on Tuesday, the lowest since June
12.
    The gasoil profits are currently at their weakest seasonal levels on record, according to
Refinitiv Eikon data that goes back to 2014. 
    The regional gasoil market is expected to get additional fresh supplies as refineries in
countries such as India, South Korea, Japan and Thailand, alongside Chinese refiners ramp up
output, market watchers said.
    But traders believe the worst from the pandemic is over, and that should support the overall
refining margins in the region going forward.
    "Currently, our team of economists are expecting gradual recovery in growth and demand to
start to kick in from the third quarter of 2020 as the most stringent containment measures are
lifted," said Peter Lee, senior oil and gas analyst at Fitch Solutions.
    "This should prove helpful for diesel demand, as industrial activities make a comeback from
months-long hiatus, although a return to pre-Covid-19 norms could take months if not quarters."
    Cash premiums for 10-ppm gasoil GO10-SIN-DIF rose to 88 cents a barrel to Singapore quotes
on Tuesday, up from 67 cents per barrel a day earlier.
    Meanwhile, cash discounts for jet fuel JET-SIN-DIF were at 67 cents a barrel to Singapore
quotes on Tuesday, compared with a 79-cent discount on Monday.
    
    TENDERS
    - UAE's Emirates General Petroleum Corporation (Emarat) was looking to buy 20,000 tonnes of
10ppm gasoil for July 26-27 delivery into Jebel Ali port.
    - The tender closes on June 30 will remain valid until July 2.
    
    SINGAPORE CASH DEALS
    - No jet fuel trades, no gasoil deals
    
    OTHER NEWS
    - Oil prices slipped on Tuesday as traders took profits after sharp gains in the previous
session and Libya's state oil company flagged progress on talks to resume exports, potentially
boosting supply.

    ASSESSMENTS    
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               46.46     1.47       3.27       44.99  GO-SIN
 GO 0.5 Diff                     -0.84     0.16     -16.00       -1.00  GO-SIN-DIF
 Spot Gas Oil 0.25%              47.10     1.47       3.22       45.63  GO25-SIN
 GO 0.25 Diff                    -0.20     0.16     -44.44       -0.36  GO25-SIN-DIF
 Spot Gas Oil 0.05%              47.93     1.41       3.03       46.52  GO005-SIN
 GO 0.05 Diff                     0.64     0.11      20.75        0.53  GO005-SIN-DIF
 Spot Gas Oil 0.001%             48.18     1.42       3.04       46.76  GO10-SIN
 GO 0.001 Diff                    0.88     0.11      14.29        0.77  GO10-SIN-DIF
 Spot Jet/Kero                   41.85     1.42       3.51       40.43  JET-SIN
 Jet/Kero Diff                   -0.67     0.12     -15.19       -0.79  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 Louise Heavens)
  
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