July 21, 2020 / 10:59 AM / 22 days ago

Asia Distillates-Gasoil cracks hit highest in over a month

    SINGAPORE, July 21 (Reuters) - Asian refining margins for 10 ppm gasoil climbed to their
strongest in more than a month on Tuesday, while cash premiums for the transportation fuel
inched higher, thanks to a stronger deal in the physical market.
    Trade sources said the gasoil market is getting support as lower rates at some refineries
have helped cut excess supplies from the region, but the ongoing new wave of coronavirus
infections will deter any sustainable demand recovery in the near term.
    Refining margins or cracks for gasoil with 10 ppm sulphur content rose 60
cents to $7.22 a barrel over Dubai crude during Asian trading hours, the highest level since
June 18.
    The cracks, however, might lose steam over the next few weeks as India and China are
expected to export higher gasoil volumes this month, compared with June, market watchers said. 
    Diesel demand typically takes a hit during monsoon months in some parts of the region as
heavy rainfall and floods curtail demand for the transportation fuel.
    Large parts of China are currently reeling from the worst floods in decades, while intense
rain and floods have swamped large parts of India's densely populated eastern states.
 
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF were at 70 cents a barrel to Singapore quotes
on Tuesday, up 1 cent from a day earlier.
    A gradual uptick in economic activities would likely support gasoil demand in the coming
months, but downside risks remain high, industry analysts said.
    
    SOUTHEAST ASIA BUDGET AIRLINE BOOM TURNS SOUR
    - Southeast Asian low-cost carriers, a key growth engine for planemakers and leasing
companies for a decade before the pandemic, are faltering financially as demand plunges, raising
questions over whether they can replace and double their fleets.
    - Auditors for Malaysia's AirAsia Group Bhd and Vietnam's VietJet Aviation JSC
 are concerned about cashflows and funding, while Indonesia's Lion Air has put the
brakes on a planned flotation. 
    
    SINGAPORE CASH DEALS
    - One gasoil deal, no jet fuel trades
    
    OTHER NEWS
    - Oil prices rose on Tuesday, helped by positive news about vaccine trials and a European
Union stimulus deal reaching levels last seen when an oil price war erupted in early March
between Russia and Saudi Arabia.

    ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               49.25     1.57       3.29       47.68  GO-SIN
 GO 0.5 Diff                     -0.89     0.01      -1.11       -0.90  GO-SIN-DIF
 Spot Gas Oil 0.25%              49.89     1.57       3.25       48.32  GO25-SIN
 GO 0.25 Diff                    -0.25     0.01      -3.85       -0.26  GO25-SIN-DIF
 Spot Gas Oil 0.05%              50.70     1.57       3.20       49.13  GO005-SIN
 GO 0.05 Diff                     0.56     0.01       1.82        0.55  GO005-SIN-DIF
 Spot Gas Oil 0.001%             50.84     1.58       3.21       49.26  GO10-SIN
 GO 0.001 Diff                    0.70     0.01       1.45        0.69  GO10-SIN-DIF
 Spot Jet/Kero                   45.14     1.53       3.51       43.61  JET-SIN
 Jet/Kero Diff                   -0.41    -0.04      10.81       -0.37  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 Devika Syamnath)
  
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