June 9, 2020 / 11:04 AM / a month ago

Asia Distillates-Gasoil cracks rise to strongest level in over five weeks

    SINGAPORE, June 9 (Reuters) - Asian refining margins for 10 ppm gasoil hit their highest
level in over a month on Tuesday, as economies gradually lift their coronavirus-induced
restrictions, boosting consumption of the industrial fuel.
    Refining margins or cracks for gasoil with 10 ppm sulphur content climbed more
than a dollar to $5.67 per barrel over Dubai crude during Asian trade, the highest since April
    Cracks for the benchmark gasoil grade have risen about 40% in the last week, after hitting a
record low of $1.77 per barrel last month, Refinitiv Eikon data showed.
    The global diesel market is showing early signs of a recovery amid indications of reopening
in certain markets, according to Fitch Solutions Country Risk & Industry Research.
    "China is leading the re-emergence from months of lockdowns, and while the economy is still
far removed from pre-COVID-19 norms, all indications point to activities and fuel demand
returning slowly but surely in the domestic market," Fitch analysts said in a note.
    "However, the same cannot be said for the most of rest of Asia and Europe. Bloated diesel
inventories near historical highs even with depressed refinery runs point to still sluggish
domestic demand and weak sentiment, although many are targeting to lift lockdown measures in
stages in the coming months."
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF rose to 30 cents a barrel to Singapore quotes
on Tuesday, compared with 15 cents on Monday.
    Meanwhile, cash discounts for jet fuel JET-SIN-DIF narrowed by two cents to 25 cents a
barrel to Singapore quotes on Tuesday.
    Traders expect the jet fuel market to find some support as regional airlines open up more
flight routes in coming days.
    Vietnam plans to allow a resumption of flights to and from countries that have had no cases
of coronavirus for 30 days, state media cited the prime minister as saying on Tuesday, with
priority destinations including Japan, South Korea and Cambodia.

    - One jet fuel trade, no gasoil deal
    - Oil prices fell on Tuesday weighed down by a stronger dollar and oversupply concerns after
it was announced that a trio of Gulf producers would end voluntary output cuts.
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               43.34    -0.96      -2.17       44.30  GO-SIN
 GO 0.5 Diff                     -2.18     0.05      -2.24       -2.23  GO-SIN-DIF
 Spot Gas Oil 0.25%              44.24    -0.96      -2.12       45.20  GO25-SIN
 GO 0.25 Diff                    -1.28     0.05      -3.76       -1.33  GO25-SIN-DIF
 Spot Gas Oil 0.05%              45.17    -0.97      -2.10       46.14  GO005-SIN
 GO 0.05 Diff                    -0.35     0.05     -12.50       -0.40  GO005-SIN-DIF
 Spot Gas Oil 0.001%             45.82    -0.86      -1.84       46.68  GO10-SIN
 GO 0.001 Diff                    0.30     0.15     100.00        0.15  GO10-SIN-DIF
 Spot Jet/Kero                   41.89    -1.44      -3.32       43.33  JET-SIN
 Jet/Kero Diff                   -0.25     0.02      -7.41       -0.27  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 Amy Caren Daniel)
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