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Energy

Asia Distillates-Gasoil cracks gain, cash discount narrows marginally

    SINGAPORE, Oct 28 (Reuters) - Asian refining margins for 10 ppm gasoil rose on Wednesday,
lifted by steady demand from China and India, but traders were concerned the market for the
industrial fuel would likely remain amply supplied for the remainder of this year.
    Refining margins or cracks for 10 ppm gasoil rose by 11 cents to $3.02 a
barrel over Dubai crude during Asian trade, partly helped by weaker raw material crude prices.
    Limited scopes for arbitrage opportunities are keeping the gasoil barrels trapped within the
region, traders said.
    The exchange of futures for swaps (EFS), which determines the gasoil price spread between
Singapore and Northwest Europe, traded around minus $6 per tonne on Wednesday. 
    Arbitrage is usually profitable when the EFS trades at about minus $15 a tonne or below,
though it also depends on other factors such as freight rates, according to traders.
    "Currently, for November, the arbs to the West are still closed. So likely barrels from the
Arab Gulf or West Coast of India will point to the Singapore Strait," a Singapore-based trader
said.
    "But in December, there might be a chance of arbs opening, and that might put a bottom to
the (current) weakness," he added.
    Cash discounts for gasoil with 10 ppm sulphur content GO10-SIN-DIF narrowed by a cent to
58 cents a barrel to Singapore quotes on Wednesday.
    
    INVENTORIES
    - Middle-distillate inventories in the Fujairah Oil Industry Zone climbed 9.8% to 4.3
million barrels in the week ended Oct. 26, data via S&P Global Platts showed.
    - The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared
with the weekly average of 2.4 million barrels in 2019, Reuters calculations showed.
    - U.S. distillate stockpiles rose by 5.3 million barrels, compared with expectations for a
draw of 2.1 million barrels, data from industry group the American Petroleum Institute (API)
showed on Tuesday.
    
    SINGAPORE CASH DEALS
    - No jet fuel trade, no gasoil deals
    
    OTHER NEWS
    - China's domestic aviation fuel consumption rebounded to near pre-COVID levels in
September, thanks to a fast recovery in passenger travel and cargo freight, although demand from
international flights remained weak, industry sources said.
    
    ASSESSMENTS    
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               41.28    -0.45      -1.08       41.73  GO-SIN
 GO 0.5 Diff                     -1.48     0.01      -0.67       -1.49  GO-SIN-DIF
 Spot Gas Oil 0.25%              41.58    -0.45      -1.07       42.03  GO25-SIN
 GO 0.25 Diff                    -1.18     0.01      -0.84       -1.19  GO25-SIN-DIF
 Spot Gas Oil 0.05%              41.78    -0.45      -1.07       42.23  GO005-SIN
 GO 0.05 Diff                    -0.98     0.01      -1.01       -0.99  GO005-SIN-DIF
 Spot Gas Oil 0.001%             42.18    -0.45      -1.06       42.63  GO10-SIN
 GO 0.001 Diff                   -0.58     0.01      -1.69       -0.59  GO10-SIN-DIF
 Spot Jet/Kero                   40.15    -0.76      -1.86       40.91  JET-SIN
 Jet/Kero Diff                   -0.63    -0.01       1.61       -0.62  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 Rashmi Aich)
  
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