February 26, 2020 / 11:32 AM / a month ago

Asia Distillates-Gasoil refining margins fall to near four-year lows

    SINGAPORE, Feb 26 (Reuters) - Asian refining margins for 10 ppm gasoil fell to the lowest in
nearly four years on Wednesday, as the region continued to wrestle with ample supplies.
    Refining margins, also known as cracks, for gasoil with 10 ppm sulphur content
fell to $9.32 per barrel over Dubai crude during Asian trading hours, a level not seen since
early April 2016. They were at $10 per barrel a day earlier.
    Cracks for the benchmark gasoil grade in Singapore have plunged about 19% this month,
Refinitiv Eikon data showed.
    Overall demand for the distillate fuel remains under pressure due to muted industrial
activity in the region, grappling with the coronavirus epidemic, which originated in China and
has spread to some two dozen countries. 
    An earlier anticipated demand boost for marine gasoil (MGO) following a switch to cleaner
marine fuels this year did not quite materialize as ship-operators preferred very low sulphur
fuel oil (VLSFO) over MGO for technical advantages.
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF dipped to 23 cents per barrel to Singapore
quotes on Wednesday, compared with a premium of 28 cents per barrel on Tuesday.
    Cash premiums for jet fuel JET-SIN-DIF were at 17 cents per barrel to Singapore quotes on
Wednesday, down from Tuesday's premiums of 21 cents per barrel.
    Jet fuel profit margins, hammered by scores of flight cancellations due to the
coronavirus-led travel restrictions, dropped to fresh multi-year lows of $7.16 per barrel over
Dubai crude. Cracks for the aviation fuel were at $7.92 per barrel on Tuesday. 
    
    FUJAIRAH STOCKS
    - Middle-distillate inventories in the Fujairah Oil Industry Zone rose 27.9% to 3.4 million
barrels in the week to Feb. 24, data via S&P Global Platts showed.
    - Stocks of middle distillates in the Fujairah oil hub have averaged 3.5 million barrels so
far in 2020, compared with a weekly average of 2.4 million barrels in 2019, Reuters calculations
showed.
    - The weekly Fujairah middle distillate stocks were 88% higher than a year earlier.
    
    API INVENTORY DATA
    - U.S. crude oil and gasoline stocks rose in the most recent week, while distillate stocks
dropped, data from industry group the American Petroleum Institute showed on Tuesday.

    - Crude inventories rose by 1.3 million barrels to 444.4 million barrels in the week to Feb.
21, compared with analysts' expectations for a build of 2 million barrels.
    - Distillate fuel inventories, which include diesel and heating oil, fell by 706,000
barrels, compared with expectations for a 1.7 million-barrel draw, the data showed.
    
    SINGAPORE CASH DEALS
    - Three gasoil trades, no jet fuel deals
    - For more information, click
    
    OTHER NEWS
    - Crude oil prices gave up early gains and slid for a fourth day on Wednesday as fears of a
coronavirus pandemic deepened as the outbreak spread in several countries outside China.
    - China has ramped up fuel exports to compensate for losses to domestic demand as it
grapples with the coronavirus outbreak, having not been able to prevent a surplus in the world's
second-largest oil consumer with cutbacks in its refining output.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                         
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                60.03    -2.64      -4.21       62.67  GO-SIN
 GO 0.5 Diff                      -1.96    -0.03       1.55       -1.93  GO-SIN-DIF
 Spot Gas Oil 0.25%               60.29    -2.74      -4.35       63.03  GO25-SIN
 GO 0.25 Diff                     -1.69    -0.12       7.64       -1.57  GO25-SIN-DIF
 Spot Gas Oil 0.05%               60.99    -2.64      -4.15       63.63  GO005-SIN
 GO 0.05 Diff                     -1.00    -0.03       3.09       -0.97  GO005-SIN-DIF
 Spot Gas Oil 0.001%              62.22    -2.67      -4.11       64.89  GO10-SIN
 GO 0.001 Diff                     0.23    -0.05     -17.86        0.28  GO10-SIN-DIF
 Spot Jet/Kero                    60.04    -2.72      -4.33       62.76  JET-SIN
 Jet/Kero Diff                     0.17    -0.04     -19.05        0.21  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 Anil D'Silva)
  
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