February 11, 2020 / 10:35 AM / 11 days ago

Asia Distillates-Gasoil refining margins, cash premiums climb

    SINGAPORE, Feb 11 (Reuters) - Asian refining margins for 10 ppm gasoil edged higher on
Tuesday amid expectations the market would strengthen in the near term as ship-owners ramp up
purchases of marine gasoil to comply with new regulations for cleaner marine fuels.
    Traders, however, remain concerned the overall gasoil market would still get affected by
demand weakness stemming from a virus outbreak that has hurt industrial and trading activity.
    Worries grew that the extent of economic disruption from the coronavirus outbreak was being
underestimated as the death toll from the epidemic in the world's second-largest economy soared
past 1,000.
    Refining margins, also known as cracks, for 10 ppm gasoil rose to $12.42 per
barrel over Dubai crude during Asian trade on Tuesday, 21 cents higher than a day earlier.
    Cracks for the benchmark gasoil grade in Singapore have risen over 22% over the last couple
of weeks since touching their lowest in more than 2-1/2 years, Refinitiv Eikon data showed.
    The International Maritime Organization (IMO) has banned ships from using fuels containing
more than 0.5% sulphur starting this year, and ship-owners are expected to increasingly switch
to marine gasoil (MGO) over the next couple of months, trade sources said.
    Cash premiums for gasoil with 10 ppm sulphur content GO10-SIN-DIF were at 73 cents per
barrel to Singapore quotes, compared with 62 cents a barrel on Monday.
    Meanwhile, cash differentials for jet fuel JET-SIN-DIF were at a premium of 3 cents a
barrel to Singapore quotes, compared with a 5-cent premium on Monday.
    Refining margins for jet fuel were up 1 cent at $10.12 per barrel over Dubai
    - China's private chemical giant and refiner Hengli Petrochemical has lowered from this week
the crude oil processing rate at its 400,000 barrels-per-day plant in northeast China to 90%
from 109%, a company spokesman told Reuters.
    - Zhejiang Petrochemical Corp, another privately controlled refiner, maintains full
operations at its 400,000-bpd refinery in east China, said a senior source with knowledge of the
firm's operations.
    - Five gasoil trades, no jet fuel deals
    - For more information, click
    - Oil prices rose around 1% in sympathy with a rally in equity markets but investors
remained jittery over the Wuhan virus in China.
    - The spreading coronavirus outbreak will hit Canada's already struggling energy industry,
Finance Minister Bill Morneau said on Monday, just as Ottawa is set to decide the fate of a
major new oil sands project.
 CASH ($/T)                     ASIA CLOSE     Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                      63.86     0.05       0.08       63.81  GO-SIN
 GO 0.5 Diff                            -1.73     0.01      -0.57       -1.74  GO-SIN-DIF
 Spot Gas Oil 0.25%                     64.44     0.05       0.08       64.39  GO25-SIN
 GO 0.25 Diff                           -1.15     0.01      -0.86       -1.16  GO25-SIN-DIF
 Spot Gas Oil 0.05%                     64.99    -0.08      -0.12       65.07  GO005-SIN
 GO 0.05 Diff                           -0.60    -0.12      25.00       -0.48  GO005-SIN-DIF
 Spot Gas Oil 0.001%                    66.32     0.15       0.23       66.17  GO10-SIN
 GO 0.001 Diff                           0.73     0.11      17.74        0.62  GO10-SIN-DIF
 Spot Jet/Kero                          62.98    -0.05      -0.08       63.03  JET-SIN
 Jet/Kero Diff                           0.03    -0.02     -40.00        0.05  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 Subhranshu Sahu)
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