July 1, 2020 / 11:01 AM / a month ago

Asia Distillates-Gasoil cash premiums drop on subdued trading

    SINGAPORE, July 1 (Reuters) - Asia's cash premiums for 10 ppm gasoil slipped on Wednesday,
hurt by muted buying interest for physical cargoes, while traders were concerned regional
refiners returning from turnarounds and ramping up production would dampen the market that is
already grappling with supplies.
    Cash premiums for 10-ppm gasoil GO10-SIN-DIF fell to 73 cents a barrel to Singapore quotes
on Wednesday, down from 88 cents per barrel a day earlier.
    Gasoil demand should get a boost in the third quarter as more countries ease
coronavirus-related restrictions and industrial activity picks up pace, but market tightness
would be disrupted by increasing supply volumes, market watchers said. 
    "The relative resilience in refinery runs through the weakest demand period has resulted in
sizeable baggage of product inventories," said Kostantsa Rangelova, head of downstream at JBC
Energy.
    Refining margins, also known as cracks, for gasoil with 10-ppm sulphur content
were at $6.84 a barrel over Dubai crude during Asian trading hours, compared with Tuesday's
$6.16 per barrel.
    Improving demand would bolster the cracks to an extent, but they are still expected to
remain at historically weak levels, industry analysts said.
    The region's gasoil surplus in the second half the year is expected to average at 840,000
barrels per day (bpd), down just by 300,000 bpd compared to the first half of the year,
according to estimates by energy consultant FGE. 
    
    INVENTORIES
    - Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 19.1% to 4.1
million barrels in the week ended June 29, data via S&P Global Platts showed.
    - The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared
with a weekly average of 2.4 million barrels in 2019, Reuters calculations showed.
    - Meanwhile, U.S. distillate fuel inventories rose by 2.6 million barrels, compared with
expectations for a decrease of 393,000 barrels, data from industry group the American Petroleum
Institute (API) showed on Tuesday.
    
    SINGAPORE CASH DEALS
    - No jet fuel trades, no gasoil deals

    ASSESSMENTS
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               47.43     0.97       2.09       46.46  GO-SIN
 GO 0.5 Diff                     -0.98    -0.14      16.67       -0.84  GO-SIN-DIF
 Spot Gas Oil 0.25%              48.07     0.97       2.06       47.10  GO25-SIN
 GO 0.25 Diff                    -0.34    -0.14      70.00       -0.20  GO25-SIN-DIF
 Spot Gas Oil 0.05%              48.96     1.03       2.15       47.93  GO005-SIN
 GO 0.05 Diff                     0.55    -0.09     -14.06        0.64  GO005-SIN-DIF
 Spot Gas Oil 0.001%             49.15     0.97       2.01       48.18  GO10-SIN
 GO 0.001 Diff                    0.73    -0.15     -17.05        0.88  GO10-SIN-DIF
 Spot Jet/Kero                   43.51     1.66       3.97       41.85  JET-SIN
 Jet/Kero Diff                   -0.64     0.03      -4.48       -0.67  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 Ramakrishnan M.)
  
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