July 9, 2020 / 11:09 AM / a month ago

Asia Distillates-Gasoil cash premiums edge higher

    SINGAPORE, July 9 (Reuters) - Asia's cash premiums for 10 ppm gasoil inched up on Thursday,
thanks to a firmer deal in the physical market, while refining profit margins for the industrial
fuel edged higher.
    Traders, however, remained worried that recovery in gasoil demand would likely come under
pressure due to renewed lockdowns as many countries face a resurgence in COVID-19 cases.
    Cash premiums for 10-ppm gasoil GO10-SIN-DIF were at 58 cents a barrel to Singapore quotes
on Thursday, two cents higher than Wednesday.
    The prompt-month time spread for 10 ppm gasoil traded at a premium of 41
cents a barrel on Thursday, compared with 67 cents per barrel a week earlier.
    In backwardation, the prompt-month contract is more expensive than subsequent months, which
makes it uneconomical to store the product and leads to a drawdown in inventories. 
    But a narrowing backwardation indicates the market may flip back into contango -- the
opposite of backwardation -- that tends to encourage holders of physical barrels to store the
product for selling later to secure higher prices.
    The region has ample gasoil supplies at the moment, while more supplies are expected in the
next few weeks as regional refiners have been ramping up output, traders said.
    Gasoil demand typically takes a beating during the third quarter as monsoon season dampens
agricultural demand, while heavy rainfall impacts transportation demand in some parts of the
region, they added.
    Refining margins for gasoil with 10-ppm sulphur content rose by 6 cents to
$6.54 a barrel over Dubai crude during Asian trading hours.
    
    INVENTORIES
    - Singapore onshore middle distillate stocks rose 1.5% to 13.6 million barrels in the week
ended July 8, Enterprise Singapore data showed.
    - The weekly Singapore middle distillate inventories have averaged at 12.8 million barrels
so far in 2020, Reuters calculations showed. This week's stocks were 23% higher year-on-year.
    - U.S. distillate stockpiles rose 3.1 million barrels to about 177.3 million barrels, their
highest level since 1983, the Energy Information Administration said on Wednesday.
    
    SINGAPORE CASH DEALS
    - One gasoil deal, no jet fuel trades
    
    OTHER NEWS
    - Oil prices edged lower on Thursday as concerns about renewed COVID-19 lockdowns in the
United States outweighed signs of a recovery in U.S. gasoline demand.

    ASSESSMENTS
 MID-DISTILLATES                                                                         
 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                 48.61     0.44       0.91       48.17  GO-SIN
 GO 0.5 Diff                       -0.86     0.01      -1.15       -0.87  GO-SIN-DIF
 Spot Gas Oil 0.25%                49.25     0.44       0.90       48.81  GO25-SIN
 GO 0.25 Diff                      -0.22     0.01      -4.35       -0.23  GO25-SIN-DIF
 Spot Gas Oil 0.05%                49.94     0.44       0.89       49.50  GO005-SIN
 GO 0.05 Diff                       0.47     0.01       2.17        0.46  GO005-SIN-DIF
 Spot Gas Oil 0.001%               50.05     0.45       0.91       49.60  GO10-SIN
 GO 0.001 Diff                      0.58     0.02       3.57        0.56  GO10-SIN-DIF
 Spot Jet/Kero                     43.33     0.27       0.63       43.06  JET-SIN
 Jet/Kero Diff                     -0.34     0.03      -8.11       -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 Krishna Chandra Eluri)
  
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