November 15, 2019 / 11:32 AM / a month ago

Asia Distillates-Gasoil cash premiums dip, cracks post weekly decline

    SINGAPORE, Nov 15 (Reuters) - Asia's cash premiums for 10 ppm gasoil inched lower on Friday
amid weaker buying interest for physical cargoes, while refining margins for the industrial fuel
slipped for a third straight week.
    Cash premiums for gasoil with 10 ppm sulphur content GO10-SIN-DIF were at 31 cents per
barrel to Singapore quotes, compared with 32 cents per barrel a day earlier.
    Refining profit margins, also known as cracks, for 10 ppm gasoil rose for a
second consecutive session to $15.25 per barrel over Dubai crude during Asian trading hours on
Friday, but posted a drop of 0.6% for the week. The margins were at $14.95 a barrel on Thursday.
    Weighed down by abundant supplies as India and China export more, cracks for the benchmark
gasoil grade in Singapore have shed about 15% over the last two months.
    The gasoil market, however, is expected to get a major boost in coming weeks as the shipping
industry switches to cleaner fuels such as marine gasoil (MGO) to adhere with International
Maritime Organization's new sulphur emissions rules that come into effect in January 2020.

    Meanwhile, cash differentials for jet fuel JET-SIN-DIF were at a discount of 60 cents per
barrel to Singapore quotes, two cents lower than Thursday. 
    Jet fuel cracks rose to $15.21 per barrel over Dubai crude, up from $14.94 per
barrel on Thursday. 
    
    INDIA FUEL DEMAND
    - India's fuel demand dropped 1.4% in October compared with the same month last year, data
from the Petroleum Planning and Analysis Cell (PPAC) showed on Thursday. Consumption of fuel, a
proxy for oil demand, totalled 17.41 million tonnes, the data showed.
    - India's diesel demand in October fell at its steepest annual rate in nearly three years,
provisional government data showed, reflecting subdued industrial and economic activity during
the month.
    - Local sales of diesel, which accounts for about two-fifths of overall fuel consumption,
dropped 7.4% year-on-year to 6.51 million tonnes. The annual decline was the most since January
2017, oil ministry data showed. 
    - India's domestic consumption pattern typically impacts the volume of the country's
exports, which in turn affects the overall supply in the wider Asian markets.
    - Asian refining profit margins for gasoil plunged to their lowest in more than five months
earlier this week, weighed down by fresh Indian gasoil exports that added to already abundant
supplies in the region.
    - Domestic jet fuel sales in October were at about 710,000 tonnes, compared with 660,000
tonnes in September, and flat compared with October 2018.
    
    ASIA GASOLINE PROFIT MARGINS RISE
    - Gasoline producers in Asia are enjoying their best profit margins in weeks, boosted by
unexpected demand for imports from India as refineries there are shut for upgrades needed to
supply cleaner fuels next year in line with domestic regulations.
    - But industry watchers say the surge could be short-lived, with Chinese refineries now
running flat out, producing significant gasoline for export that will depress prices.
    - Asia's gasoline 'crack' - premiums of refining Brent crude into 92-octane petrol - neared
a six-week high of $10.72 a barrel on Nov. 12. That fell to almost $9 on Nov. 14, but this was
still more than 18 times higher than levels from the same time a year ago. GL92-SIN-CRK
    - The jump was all the more surprising given gasoline demand is typically lower during the
current season, viewed as 'off-peak' with fewer motorists on Asia's roads because of factors
like monsoon rains in India.
    
    ARA STOCKS
    - Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and
storage hub STK-GO-ARA dropped 3.3% to 2.5 million tonnes in the week to Nov. 14, data from
Dutch consultancy Insights Global showed.
    - Gasoil stocks were down as demand from inland locations continued to draw the product from
ARA, Insights Global's Lars van Wageningen said.
    - ARA jet fuel inventories STK-JET-ARA fell 1.5% to 733,000 tonnes, the data showed.
    - Compared with a year ago, jet fuel stocks were 15.3% higher, while gasoil inventories were
up about 12%.
    
    EIA INVENTORIES
    - U.S. crude oil stockpiles rose last week for the third consecutive week as production hit
a record high, while distillate inventories, which include heating oil, fell for the eighth week
in a row, the Energy Information Administration said on Thursday.
    - Crude inventories rose by 2.2 million barrels in the week to Nov. 8, compared
with analysts' expectations in a Reuters poll for a 1.6 million-barrel rise.
    - Refinery crude runs rose by 155,000 bpd and utilization rates
increased by 1.8 percentage points to 87.8% of total capacity, EIA data showed.
    - Distillate stockpiles, which include diesel and heating oil, fell by 2.5
million barrels in the week, versus analysts' expectations in a Reuters poll for a
950,000-barrel drop, the EIA data showed.

    SINGAPORE CASH DEALS
    - Three gasoil trades, no jet fuel deals.
    - For more information, please click
    
    OTHER NEWS
    - OPEC said on Thursday it expected demand for its oil to fall in 2020 as rivals pumped more
despite a smaller surplus of crude in the global market, building a case for the group to
maintain supply curbs when it meets to discuss policy next month.
    - Oil prices rose on Friday as OPEC's outlook for oil demand next year fuelled hopes that
the producer group and its associates will keep a lid on supply when they meet to discuss policy
on output next month.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)           ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%              72.50     0.35       0.49       72.15  GO-SIN
 GO 0.5 Diff                    -3.49     0.06      -1.69       -3.55  GO-SIN-DIF
 Spot Gas Oil 0.25%             72.66     0.35       0.48       72.31  GO25-SIN
 GO 0.25 Diff                   -3.33     0.06      -1.77       -3.39  GO25-SIN-DIF
 Spot Gas Oil 0.05%             75.59     0.35       0.47       75.24  GO005-SIN
 GO 0.05 Diff                   -0.40     0.06     -13.04       -0.46  GO005-SIN-DIF
 Spot Gas Oil 0.001%            76.31     0.29       0.38       76.02  GO10-SIN
 GO 0.001 Diff                   0.31    -0.01      -3.13        0.32  GO10-SIN-DIF
 Spot Jet/Kero                  75.05     0.27       0.36       74.78  JET-SIN
 Jet/Kero Diff                  -0.60     0.02      -3.23       -0.62  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 Shinjini Ganguli)
  
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