February 11, 2019 / 11:26 AM / 7 days ago

Asia Distillates-Gasoil margins climb on expectations of tighter supply

    SINGAPORE, Feb 11 (Reuters) - Asian refining margins for 10ppm gasoil rose on Monday to
their highest levels in about four weeks, buoyed by weaker crude prices as well as expectations
of lower availability of barrels in the market after middle distillate inventories in Singapore
dropped last week.
    Refining margins, also known as cracks, for gasoil with 10ppm sulphur content
rose to $15.05 a barrel over Dubai crude during Asian trading hours, compared with $14.50 a
barrel on Friday.
    Singapore middle distillates stocks fell 2 percent last week to 11.6 million barrels in a
third straight week of draw-downs, data from Enterprise Singapore showed on Thursday.

    The benchmark gasoil margins have gained about 10 percent over the last two weeks.
    Crude oil prices fell by around 1 percent on Monday as drilling activity in the United
States, currently the world's largest oil producer, picked up and financial markets were pulled
down by trade concerns.
    The middle distillate market in general will be supported by seasonal maintenance at some
refineries in the region over the next couple of months which will reduce supplies, trade
sources said.
    Cash discounts for 10ppm gasoil GO10-SIN-DIF were at 33 cents a barrel to Singapore quotes
on Monday, compared with a discount of 32 cents a barrel on Friday.
    Quite a few gasoil cargoes from Asia are heading towards the West, but the arbitrage window
is not quite open, traders said. 
    The exchange of futures for swaps (EFS), which determines the gasoil price spread between
Singapore and North West Europe, was around minus $16 per tonne on Monday,
according to Refinitiv Eikon data.
    Two newly-built very large crude carriers (VLCCs) -- Ascona and Olympic Laurel -- that
loaded diesel cargoes in Asia on the maiden voyages last month are expected to discharge in West
Africa, while two other newbuilds, Dijilah and Front Defender, are expected to discharge in
Europe, traders said.
    Meanwhile, cash differentials for jet fuel JET-SIN-DIF widened their discounts by a cent
to be at 20 cents a barrel to Singapore quotes on Monday.
    Jet fuel cracks were at $14.21 a barrel over Dubai crude on Monday, up from
$13.99 a barrel on Friday. 

    
    SINGAPORE CASH DEALS
    - Six gasoil deals, no jet fuel trades.
    - Winson Oil sold 156,000 barrels of 10ppm gasoil to Vitol for Feb. 26-March 2 loading at a
discount of 30 cents a barrel to Singapore quotes.
    - Singapore trader Hin Leong sold 156,000 barrels of 10ppm gasoil to Vitol for Feb. 26-March
2 loading at a discount of 30 cents a barrel to Singapore quotes.
    - Total bought 150,000 barrels of 10ppm gasoil from Winson for Feb. 27-March 3 loading at a
discount of 30 cents a barrel to Singapore quotes.
    - Hin Leong sold 250,000 barrels of 10ppm gasoil to Trafigura for Feb. 26-March 2 loading at
a discount of 20 cents a barrel to Singapore quotes.
    - Trafigura bought 150,000 barrels of 10ppm gasoil from Winson for March 7-11 loading at a
discount of 35 cents a barrel to Singapore quotes.
    - Hin Leong sold 250,000 barrels of 10ppm gasoil to Trafigura for Feb. 26-March 2 loading at
a discount of 20 cents a barrel to Singapore quotes.
    - For more information, please click   
    
    
    OTHER NEWS
    - Middle East oil benchmarks Dubai and DME Oman have nudged above prices for Brent crude, an
unusual move as U.S. sanctions on Venezuela and Iran along with output cuts by OPEC tighten
supply of medium to heavy sour oil, traders and analysts said.
    - U.S. energy firms this week increased the number of oil rigs operating for the second time
in three weeks after oil prices soared over 18 percent in January.
    - The second largest crude distillation unit (CDU) was shut by a fire on Sunday at Phillips
66's 330,000 barrel-per-day (bpd) joint-venture Wood River, Illinois, refinery, a source
familiar with plant operations said.
    - Iran has set the official selling price (OSP) of its Iranian Light grade for its Asian
buyers at 40 cents above the Oman/Dubai average for March, unchanged from the previous month, an
industry source with direct knowledge of the matter said on Monday.

    
    ASSESSMENTS
 MID-DISTILLATES                                                                             
 CASH ($/T)             ASIA CLOSE         Change   % Change    Prev Close   RIC
 Spot Gas Oil 0.5%                  73.70     1.15        1.59        72.55  GO-SIN
 GO 0.5 Diff                        -2.75     0.24       -8.03        -2.99  GO-SIN-DIF
 Spot Gas Oil 0.25%                 74.23     1.14        1.56        73.09  GO25-SIN
 GO 0.25 Diff                       -2.22     0.23       -9.39        -2.45  GO25-SIN-DIF
 Spot Gas Oil 0.05%                 74.80     1.16        1.58        73.64  GO005-SIN
 GO 0.05 Diff                       -1.65     0.25      -13.16        -1.90  GO005-SIN-DIF
 Spot Gas Oil 0.001%                76.12     0.90        1.20        75.22  GO10-SIN
 GO 0.001 Diff                      -0.33    -0.01        3.12        -0.32  GO10-SIN-DIF
 Spot Jet/Kero                      75.49     0.50        0.67        74.99  JET-SIN
 Jet/Kero Diff                      -0.20    -0.01        5.26        -0.19  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 Jane Merriman)
  
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