January 3, 2020 / 11:45 AM / 25 days ago

Asia Distillates-Gasoil cash premiums rise, cracks post weekly gain

    SINGAPORE, Jan 3 (Reuters) - Asia's cash premiums for 10ppm
gasoil rose on Friday, while refining profit margins for the
transportation fuel gained 3% in the week after a global switch
to cleaner marine fuels.
    From Jan. 1, the International Maritime Organization (IMO)
has banned ships from using fuels with a sulphur content above
0.5%, compared with 3.5% earlier. This is expected to boost the
gasoil market over the next few months, as a section of
ship-owners opt for marine gasoil (MGO) to adhere with the new
rules.
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF climbed to 62
cents per barrel over Singapore quotes on Friday, up from a
premium of 56 cents per barrel a day earlier.
    Refining margins, or cracks, for gasoil with 10 ppm sulphur
content rose to $16.15 per barrel over Dubai crude
during Asian trade on Friday, compared with $15.81 per barrel on
Thursday.
    Cracks for the benchmark gasoil grade in Singapore have
risen 3.1% this week, Refinitiv Eikon data showed.
    In order to meet the new sulphur cap on marine fuels,
shippers so far have appeared to be favouring very low-sulphur
fuel oil (VLSFO) mixes over distillate fuels.
    But testing companies examining the newer, low-sulphur
marine blends acquired from major markets have found sediment at
levels that could damage the engines of ocean-going vessels.

    "Sediment is a critical component, so blenders try to
minimize potential sediment content. But if engine troubles are
reported, many (VLSFO users) would move to the MGO pool," a
Seoul-based trader said.
    Meanwhile, jet fuel cracks rose to $15.25 per
barrel over Dubai crude on Friday, up from $15.09 a barrel on
Thursday.
    Cash premiums for jet fuel JET-SIN-DIF were at 33 cents
per barrel to Singapore quotes on Friday, compared with a
29-cent premium on Thursday.
    
    ARA STOCKS
    - Gasoil stocks independently held in the
Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub
STK-GO-ARA rose 3.5% to 2.5 million tonnes in the week to Jan.
2, data from Dutch consultancy Insights Global showed.
    - Gasoil inventories were up on imports from Russia,
Insights Global's Lars van Wageningen said. The stocks were
seasonally at their highest since 2015.
    - ARA jet fuel inventories STK-JET-ARA fell 3.5% to
584,000 tonnes, the data showed.
    - Compared with a year earlier, jet fuel stocks were 0.7%
higher, while gasoil inventories were up 21.7%.
    
    SINGAPORE CASH DEALS
    - No gasoil trades, one jet fuel deal.
    - For more information, click
    
    OTHER NEWS
    - Brent crude futures jumped nearly $3 on Friday to their
highest since September after a U.S. air strike killed key
Iranian and Iraqi military personnel, raising concerns that
escalating Middle East tensions may disrupt oil supplies.
    - Venezuela has changed the formulas for calculating
royalties energy companies pay the government to remove
references to fuel oil and some crude grades, driven by stricter
rules governing marine fuel emissions, according to a document
seen by Reuters.

    
    ASSESSMENTS
 MID-DISTILLATES                                                                                
 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close   RIC
 Spot Gas Oil 0.5%                 80.91     2.17       2.76        78.74  GO-SIN
 GO 0.5 Diff                       -2.13    -0.03       1.43        -2.10  GO-SIN-DIF
 Spot Gas Oil 0.25%                81.54     2.17       2.73        79.37  GO25-SIN
 GO 0.25 Diff                      -1.50    -0.03       2.04        -1.47  GO25-SIN-DIF
 Spot Gas Oil 0.05%                82.80     2.11       2.61        80.69  GO005-SIN
 GO 0.05 Diff                      -0.24    -0.09      60.00        -0.15  GO005-SIN-DIF
 Spot Gas Oil 0.001%               83.66     2.26       2.78        81.40  GO10-SIN
 GO 0.001 Diff                      0.62     0.06      10.71         0.56  GO10-SIN-DIF
 Spot Jet/Kero                     82.38     2.18       2.72        80.20  JET-SIN
 Jet/Kero Diff                      0.33     0.04      13.79         0.29  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 Maju Samuel)
  
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