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Energy

Asia Distillates-Gasoil cracks drop for second straight week amid ample supplies

    SINGAPORE, Aug 28 (Reuters) - Asian refining margins for 10 ppm gasoil dropped further on
Friday, posting a second consecutive weekly decline, weighed down by ample availability of
supplies and subdued demand due to prolonged coronavirus lockdowns in several countries.
    Refining profit margins, also known as cracks, for 10 ppm gasoil dropped to
$4.15 a barrel over Dubai crude during Asian trading hours, which is 39.5% lower than its value
at the end of July, and the lowest level since June 5. 
    The cracks have fallen 20% this week, Refinitiv Eikon data showed.
    Higher exports from key markets due to sluggish domestic demand is adding to the regional
supplies, which are being trapped within the region due to lack of arbibrage opportunities,
trade sources said.
    Gasoil exports from India are expected to close at about 2.2 million-2.3 million tonnes in
August, Refinitiv oil research assessments showed, compared with 2.06 million tonnes last month.
    Meanwhile, China's August gasoil exports are forecast to close at 1.3 million-1.4 million
tonnes, and are expected to increase into the fourth quarter as refiners work to exhaust their
oil export quotas before the end of the year, the assessments showed.
    The exchange of futures for swaps (EFS), which determines the gasoil price spread between
Singapore and Northwest Europe, traded around minus $5 per tonne on Friday,
typically making it unprofitable for arbitrage shipments.
    Arbitrage is usually workable when the EFS trades at about minus $15 a tonne or below,
though it depends on other factors such as freight rates as well, according to traders.
    Cash discounts for 10 ppm gasoil GO10-SIN-DIF were at 45 cents a barrel to Singapore
quotes on Friday, compared with a discount of 35 cents per barrel a day earlier.
    
    ARA STOCKS
    - Jet fuel stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and
storage hub STK-JET-ARA dropped 17.6% to 817,000 tonnes in the week ended Aug. 27, data from
Dutch consultancy Insights Global showed.
    - The data showed ARA gasoil inventories STK-GO-ARA rose 4% to 2.7 million tonnes.

    SINGAPORE CASH DEALS
    - Two 2500 ppm gasoil deals, no jet fuel trades
    
    OTHER NEWS
    - Spot prices for some Asian crude oil grades slipped into discounts to dated Brent due to
subdued demand from refiners in the region, narrowing the price gap between low-sulphur crude
and crudes from the Middle East, traders said.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                46.27    -1.37      -2.88       47.64  GO-SIN
 GO 0.5 Diff                      -2.32    -0.03       1.31       -2.29  GO-SIN-DIF
 Spot Gas Oil 0.25%               46.59    -1.33      -2.78       47.92  GO25-SIN
 GO 0.25 Diff                     -2.00     0.01      -0.50       -2.01  GO25-SIN-DIF
 Spot Gas Oil 0.05%               46.70    -1.27      -2.65       47.97  GO005-SIN
 GO 0.05 Diff                     -1.89     0.07      -3.57       -1.96  GO005-SIN-DIF
 Spot Gas Oil 0.001%              48.14    -1.44      -2.90       49.58  GO10-SIN
 GO 0.001 Diff                    -0.45    -0.10      28.57       -0.35  GO10-SIN-DIF
 Spot Jet/Kero                    41.63    -1.42      -3.30       43.05  JET-SIN
 Jet/Kero Diff                    -1.13    -0.29      34.52       -0.84  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 Sherry Jacob-Phillips)
  
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