Asia Distillates-Gasoil cash premiums drop, cracks decline
(Reuters) - Asia's cash premiums for 10 ppm gasoil dropped to their lowest level in more than 1-1/2 months, hurt by weaker buying interest in the physical market. Cash premiums for 10 ppm gasoil fell to 46 cents a barrel to Singapore quotes, the lowest since June 9. They were at a premium of 53 cents a barrel.
Refining margins or cracks for gasoil with 10 ppm sulfur content dropped 50 cents to $6.78 a barrel over Dubai crude during Asian trading hours on Friday. The overall pace and effectiveness of economic activity in the region would be an important factor to dictate the demand recovery for gasoil in coming months, industry analysts said. "On the demand side, compared to the large-scale lockdowns happened in Asia a few months back, we are now seeing more localised containment measures as countries lift their lockdown restrictions," said Qiaoling Chen, analyst at Wood Mackenzie. "This means the impact on fuels such as diesel is very unlikely to be the same extent we saw in April when oil demand fell the steepest. Our latest July outlook expects diesel to return to positive growth by the fourth quarter this year."
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dipped 1.9% to 2.7 million tons in the week to July 23, data from Dutch consultancy Insights Global showed. - The data showed ARA jet fuel inventories rose 0.8% to 984,000 tons, the highest on record according to data that goes back to 2003. - Compared with a year earlier, jet fuel stocks were 24.2% higher, while gasoil inventories were down 10.4%.
India's crude oil processing gathered pace in June, rising 10.9% from May to 4.29 million barrels per day, as further easing of coronavirus-led curbs lifted fuel demand. - Congestion at China's east coast oil ports that is adding to costs for shippers and importers is likely to run well into August, with crude shipments set to hit another record high this month, according to analysts and Refinitiv data.
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