January 23, 2020 / 11:00 AM / a month ago

Asia Distillates-Gasoil cash premiums rise; Singapore middle distillate stocks jump

    SINGAPORE, Jan 23 (Reuters) - Asia's cash premiums for 10 ppm gasoil rose on Thursday,
backed by a couple of firmer deals in the physical market, while Singapore middle distillate
inventories climbed to a five-week high.
    Cash differentials for 10 ppm gasoil in Singapore GO10-SIN-DIF were at a premium of 22
cents a barrel to Singapore quotes on Thursday, up from 15 cents per barrel a day earlier.
    Refining margins or cracks for gasoil with 10 ppm sulphur content slipped 2
cents to $12.01 per barrel over Dubai crude during Asian trade on Thursday.
    Cracks for the benchmark gasoil grade in Singapore have shed 25% this year as an anticipated
demand boost following a switch to cleaner marine fuels in the shipping sector has not yet
    Demand for marine gasoil (MGO) from ship-owners, however, is expected to increase over the
next couple of months, though at a much slower rate than expected earlier, traders and analysts
    Meanwhile, overall gasoil supply in the region remains adequate and with more refining
capacities coming online this year, the market would remain well-supplied, trade sources said.
    Refining profits for jet fuel inched higher to $10.83 per barrel over Dubai
crude on Thursday, up from a more than 2-1/2-year low of $10.72 a barrel on Wednesday.
    China's week-long Lunar New Year holiday, which starts on Saturday, typically boosts
aviation passenger demand in the region, but traders were concerned the travelling season would
be impacted due to an outbreak of a new coronavirus.
    The virus outbreak, which began in the central Chinese city of Wuhan, has killed 17 and
infected nearly 600 people, and global health authorities fear the transmission rate will
accelerate as hundreds of millions of Chinese travel at home and abroad during the holiday.
    Singapore Airlines' budget carrier Scoot said on Thursday it had suspended its daily flights
to China's Wuhan after authorities locked down the city, while Thai AirAsia said it was
suspending all flights between Thailand and Wuhan until Jan. 28.
    Cash premiums for jet fuel JET-SIN-DIF were at 45 cents per barrel over Singapore quotes
on Thursday, compared with 40 cents per barrel on Wednesday.
    - Singapore onshore middle distillate stocks rose 6.9% to a five-week high of 10.8 million
barrels in the week to Jan. 22, Enterprise Singapore data showed.
    - Weekly middle distillate inventories have averaged 10.3 million barrels so far in 2020,
having averaged 11.1 million barrels a week in 2019, Reuters calculations showed.
    - Overall, onshore middle distillate inventories were 12.7% lower year on year.
    - Light distillate stocks fell 160,000 barrels to a two-week low of 12.97 million barrels in
the week to Wednesday, while fuel oil stocks rose 85,000 barrels to a near seven-month high of
22.8 million barrels, Enterprise Singapore data showed.
    - China's gasoline exports surged nearly a third in 2019, data showed on Thursday, setting a
seventh straight annual record as a boom in new refineries chimed with a slump in vehicle sales
to produce a domestic fuel surplus ripe for shipment elsewhere.
    - Exports of gasoline from China, the world's biggest oil importer and second-largest
consumer, climbed to 16.37 million tonnes last year, up 27% from 2018, according to data from
the General Administration of Customs.
    - For 2019, diesel exports also rose to a record of 21.98 million tonnes, up 15% from a year
earlier. In December, shipments climbed to 1.63 million tonnes, up 4% from the same month a year
earlier but down 26% from November.
    - Amid China's slowdown in economic growth, analysts from the research arm of state firm
China National Petroleum Corp (CNPC) expect domestic gasoline and diesel demand will remain
under pressure in 2020, as China is forecast to add 27 million tonnes of new refining capacity.
    - U.S. crude oil stocks rose in the most recent week, along with gasoline and distillate
inventories, data from industry group the American Petroleum Institute showed on Tuesday.

    - Crude inventories rose by 1.6 million barrels in the week to Jan. 17, to 433 million
barrels, compared with analysts' expectations for a draw of 1 million barrels.
    - Distillate fuel inventories, which include diesel and heating oil, rose by 3.5 million
barrels, compared with expectations for a 1 million-barrel increase, the data showed.
    - Two gasoil trades, no jet fuel deals.
    - For more information, click
    - Chinese oil refiners are unlikely to boost their output of cleaner marine fuels until at
least the second quarter of 2020 because they will need to upgrade their facilities, even after
the government granted tax waivers to boost output.
    - The global shipping market is set for a recovery, benefiting from new global rules on
marine fuels that came into effect at the beginning of the year after more than a decade of
tough market conditions, according to IHS Markit.
 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                 71.49    -1.64      -2.24       73.13  GO-SIN
 GO 0.5 Diff                       -1.97     0.04      -1.99       -2.01  GO-SIN-DIF
 Spot Gas Oil 0.25%                72.20    -1.64      -2.22       73.84  GO25-SIN
 GO 0.25 Diff                      -1.26     0.04      -3.08       -1.30  GO25-SIN-DIF
 Spot Gas Oil 0.05%                73.34    -1.64      -2.19       74.98  GO005-SIN
 GO 0.05 Diff                      -0.12     0.04     -25.00       -0.16  GO005-SIN-DIF
 Spot Gas Oil 0.001%               73.68    -1.62      -2.15       75.30  GO10-SIN
 GO 0.001 Diff                      0.22     0.07      46.67        0.15  GO10-SIN-DIF
 Spot Jet/Kero                     72.73    -1.50      -2.02       74.23  JET-SIN
 Jet/Kero Diff                      0.45     0.05      12.50        0.40  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 Simon Cameron-Moore)
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