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Asia Distillates-Gasoil spot premiums linger near 2-mth lows, prompt-month spread widens

SINGAPORE, Aug 5 (Reuters) – Asia’s cash premiums for 10ppm gasoil lingered near their lowest levels in more than two months on Wednesday, while the prompt-month spread for the industrial fuel grade in Singapore deepened its contango structure. The likelihood of increased exports from key markets due to weaker domestic demand alongside limited East-West arbitrage opportunities were prompting a supply overhang in the region, trade sources said. Fresh lockdowns due to a resurgence in COVID-19 cases piled on woes around gasoil demand that typically takes a seasonal hit during monsoon as heavy rainfall and floods hammer transportation demand in some parts of the region. Cash premiums for gasoil with 10 ppm sulphur content <GO10-SIN-DIF> remained unchanged at 9 cents a barrel to Singapore quotes on Wednesday. The August/September time spread for 10 ppm gasoil, which flipped to a contango structure on Tuesday, traded at a discount of 25 cents a barrel, compared with minus 9 cents per barrel a day earlier, Refinitiv Eikon data showed. INVENTORIES – Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 19.1% to 3.6 million barrels in the week ended Aug. 3, data via S&P Global Platts showed. – The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared with a weekly average of 2.4 million barrels in 2019, Reuters calculations showed. – Meanwhile, U.S. distillate fuel inventories rose by 3.8 million barrels, compared with expectations for a build of 279,000 barrels, data from industry group the American Petroleum Institute (API) showed on Tuesday. SINGAPORE CASH DEALS – Two 500 ppm gasoil deals, one jet fuel trade OTHER NEWS – Oil prices firmed on Wednesday after data showed a big drop in U.S. crude inventories, although concerns mounting virus cases will lead to reduced fuel demand capped gains. – U.S. oil refining capacity this year could decline by the largest amount in nearly a decade as pandemic-related travel curbs and a fire shut several plants, reversing years of small gains. ASSESSMENTS MID-DISTILLATES CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Spot Gas Oil 0.5% 48.46 1.37 2.91 47.09 <GO-SIN> GO 0.5 Diff -1.50 -0.05 3.45 -1.45 <GO-SIN-DIF> Spot Gas Oil 0.25% 49.01 1.32 2.77 47.69 <GO25-SIN> GO 0.25 Diff -0.95 -0.10 11.76 -0.85 <GO25-SIN-DIF> Spot Gas Oil 0.05% 49.05 1.19 2.49 47.86 <GO005-SIN> GO 0.05 Diff -0.91 -0.23 33.82 -0.68 <GO005-SIN-DIF> Spot Gas Oil 0.001% 50.05 1.42 2.92 48.63 <GO10-SIN> GO 0.001 Diff 0.09 0.00 0.00 0.09 <GO10-SIN-DIF> Spot Jet/Kero 44.35 1.55 3.62 42.80 <JET-SIN> Jet/Kero Diff -0.45 -0.01 2.27 -0.44 <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 Uttaresh.V)

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