Asia Distillates-Gasoil margins climb on expectations of tighter supply

SINGAPORE, Feb 11 (Reuters) - Asian refining margins for 10ppm gasoil rose on Monday to
their highest levels in about four weeks, buoyed by weaker crude prices as well as expectations
of lower availability of barrels in the market after middle distillate inventories in Singapore
dropped last week.
Refining margins, also known as cracks, for gasoil with 10ppm sulphur content
rose to $15.05 a barrel over Dubai crude during Asian trading hours, compared with $14.50 a
barrel on Friday.
Singapore middle distillates stocks fell 2 percent last week to 11.6 million barrels in a
third straight week of draw-downs, data from Enterprise Singapore showed on Thursday.

The benchmark gasoil margins have gained about 10 percent over the last two weeks.
Crude oil prices fell by around 1 percent on Monday as drilling activity in the United
States, currently the world's largest oil producer, picked up and financial markets were pulled
down by trade concerns.
The middle distillate market in general will be supported by seasonal maintenance at some
refineries in the region over the next couple of months which will reduce supplies, trade
sources said.
Cash discounts for 10ppm gasoil <GO10-SIN-DIF> were at 33 cents a barrel to Singapore quotes
on Monday, compared with a discount of 32 cents a barrel on Friday.
Quite a few gasoil cargoes from Asia are heading towards the West, but the arbitrage window
is not quite open, traders said.
The exchange of futures for swaps (EFS), which determines the gasoil price spread between
Singapore and North West Europe, was around minus $16 per tonne on Monday,
according to Refinitiv Eikon data.
Two newly-built very large crude carriers (VLCCs) -- Ascona and Olympic Laurel -- that
loaded diesel cargoes in Asia on the maiden voyages last month are expected to discharge in West
Africa, while two other newbuilds, Dijilah and Front Defender, are expected to discharge in
Europe, traders said.
Meanwhile, cash differentials for jet fuel <JET-SIN-DIF> widened their discounts by a cent
to be at 20 cents a barrel to Singapore quotes on Monday.
Jet fuel cracks were at $14.21 a barrel over Dubai crude on Monday, up from
$13.99 a barrel on Friday.


SINGAPORE CASH DEALS
- Six gasoil deals, no jet fuel trades.
- Winson Oil sold 156,000 barrels of 10ppm gasoil to Vitol for Feb. 26-March 2 loading at a
discount of 30 cents a barrel to Singapore quotes.
- Singapore trader Hin Leong sold 156,000 barrels of 10ppm gasoil to Vitol for Feb. 26-March
2 loading at a discount of 30 cents a barrel to Singapore quotes.
- Total bought 150,000 barrels of 10ppm gasoil from Winson for Feb. 27-March 3 loading at a
discount of 30 cents a barrel to Singapore quotes.
- Hin Leong sold 250,000 barrels of 10ppm gasoil to Trafigura for Feb. 26-March 2 loading at
a discount of 20 cents a barrel to Singapore quotes.
- Trafigura bought 150,000 barrels of 10ppm gasoil from Winson for March 7-11 loading at a
discount of 35 cents a barrel to Singapore quotes.
- Hin Leong sold 250,000 barrels of 10ppm gasoil to Trafigura for Feb. 26-March 2 loading at
a discount of 20 cents a barrel to Singapore quotes.
- For more information, please click


OTHER NEWS
- Middle East oil benchmarks Dubai and DME Oman have nudged above prices for Brent crude, an
unusual move as U.S. sanctions on Venezuela and Iran along with output cuts by OPEC tighten
supply of medium to heavy sour oil, traders and analysts said.
- U.S. energy firms this week increased the number of oil rigs operating for the second time
in three weeks after oil prices soared over 18 percent in January.
- The second largest crude distillation unit (CDU) was shut by a fire on Sunday at Phillips
66's 330,000 barrel-per-day (bpd) joint-venture Wood River, Illinois, refinery, a source
familiar with plant operations said.
- Iran has set the official selling price (OSP) of its Iranian Light grade for its Asian
buyers at 40 cents above the Oman/Dubai average for March, unchanged from the previous month, an
industry source with direct knowledge of the matter said on Monday.


ASSESSMENTS
MID-DISTILLATES
CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC
Spot Gas Oil 0.5% 73.70 1.15 1.59 72.55 <GO-SIN>
GO 0.5 Diff -2.75 0.24 -8.03 -2.99 <GO-SIN-DIF>
Spot Gas Oil 0.25% 74.23 1.14 1.56 73.09 <GO25-SIN>
GO 0.25 Diff -2.22 0.23 -9.39 -2.45 <GO25-SIN-DIF>
Spot Gas Oil 0.05% 74.80 1.16 1.58 73.64 <GO005-SIN>
GO 0.05 Diff -1.65 0.25 -13.16 -1.90 <GO005-SIN-DIF>
Spot Gas Oil 0.001% 76.12 0.90 1.20 75.22 <GO10-SIN>
GO 0.001 Diff -0.33 -0.01 3.12 -0.32 <GO10-SIN-DIF>
Spot Jet/Kero 75.49 0.50 0.67 74.99 <JET-SIN>
Jet/Kero Diff -0.20 -0.01 5.26 -0.19 <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 Jane Merriman)


2019-02-11 13:23:14

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