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Asia Distillates-Gasoil crack nears two-month low as demand outlook sours

    SINGAPORE, March 17 (Reuters) - Asian refining margins for 10 ppm gasoil extended losses on
Wednesday, slipping to a near two-month low over concerns a rebound in fuel demand may take
longer than anticipated.
    "Developments on the demand side have meanwhile remained broadly supportive, though the
recovery is once more facing headwinds," said JBC Energy in a note to clients on Wednesday. 
    "Any sustained near-term optimism for individual products remains misplaced in our view, and
is likely unsustainable, if only because of the significant amount of spare refining capacity
that could run higher to remedy any actual continued tightness, with the last few years also
having increasingly expanded the speed at which players can react to strong pricing signals,"
said JBC. 
    The front-month 10 ppm gasoil crack fell to $5.70 per barrel over Dubai crude,
its lowest since Jan. 27, during Asian trading hours, compared with $5.87 a barrel in the
previous trading session, Refinitiv data in Eikon showed.
    This was despite weaker crude oil prices on Wednesday, which slipped for a fourth day as
concerns about weaker demand in Europe outweighed an industry report that showed U.S. crude
stockpiles unexpectedly fell last week.
        
    INVENTORIES
    Middle-distillate inventories in the Fujairah Oil Industry Zone dropped to a seven-month low
in the week to March 15, down 7% from the previous week to 3.461 million barrels, data via S&P
Global Platts showed.
    Fujairah's middle distillate stocks, however, were 13% higher than year-ago levels.
    Weekly stocks in Fujairah have averaged 4.2 million barrels so far this year, on par with
the weekly average of 4.2 million barrels in 2020, Reuters calculations showed.
    U.S. distillate fuel inventories, which include diesel and heating oil, rose by 904,000
barrels, versus expectations for a draw of 3.4 million barrels, data from industry group
American Petroleum Institute showed.
            
    CHINA OUTPUT 
    China's diesel output rose to 24.59 million tonnes in the first two months of 2021, up 4%
from a year earlier, according to data released by the National Bureau of Statistics on
Wednesday.
    Output of kerosene, however, fell to 6.818 million tonnes during the same period, down 10%
from last year, the data showed.
    The statistics bureau did not disclose numbers for January and February separately. 
    
    INDIA RESPONDS 
    Indian state refiners are planning to cut oil imports from Saudi Arabia by about a quarter
in May, in an escalating stand-off with Riyadh following OPEC's decision to ignore calls from
New Delhi to help the global economy with higher supply.
    
    SMUGGLING BUST 
    China foiled criminals seeking to smuggle nearly 1 million tonnes of refined oil worth 5
billion yuan ($770 million), with officials seizing 11 ships and detaining 171 suspects in a
sprawling swoop on Tuesday, customs authorities said.
    A total of 14 gangs were busted on Tuesday, the General Administration of Customs said in a
statement. 
    It was not immediately clear if the gangs were trying to smuggle the oil into or out of the
country. China is Asia's biggest refiner and consumer of oil products such as gasoline and
diesel.
            
    SINGAPORE CASH DEALS
    No gasoil or jet fuel trades.
    
    ASSESSMENTS
 MID-DISTILLATES                                                             
 CASH ($/T)                     ASIA CLOSE     Change  % Change  Prev Close  RIC
 Spot Gas Oil 0.5%              70.49          0.13    0.18      70.36       GO-SIN
 GO 0.5 Diff                    -1.58          -0.01   0.64      -1.57       GO-SIN-DIF
 Spot Gas Oil 0.25%             70.66          0.13    0.18      70.53       GO25-SIN
 GO 0.25 Diff                   -1.41          -0.01   0.71      -1.40       GO25-SIN-DIF
 Spot Gas Oil 0.05%             70.99          0.13    0.18      70.86       GO005-SIN
 GO 0.05 Diff                   -1.08          -0.01   0.93      -1.07       GO005-SIN-DIF
 Spot Gas Oil 0.001%            71.89          0.13    0.18      71.76       GO10-SIN
 GO 0.001 Diff                  -0.18          -0.01   5.88      -0.17       GO10-SIN-DIF
 Spot Jet/Kero                  69.09          0.17    0.25      68.92       JET-SIN
 Jet/Kero Diff                  -0.32          0.06    -15.79    -0.38       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 Roslan Khasawneh; Editing by Krishna Chandra Eluri)
  
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