January 15, 2020 / 11:03 AM / 11 days ago

Asia Distillates-Gasoil cracks edge higher, cash premiums dip

    SINGAPORE, Jan 15 (Reuters) - Asian refining margins for 10 ppm gasoil climbed on Wednesday,
partly due to a dip in raw material crude prices, while cash premiums for the industrial fuel
dropped amid weaker buying interest for physical cargoes.
    Refining margins or cracks for gasoil with 10 ppm sulphur content rose to
$13.13 per barrel over Dubai crude during Asian trading hours on Wednesday, compared with an
over 8-month low of $12.84 per barrel on Tuesday.
    Crude oil prices slipped on Wednesday amid concerns that the pending Phase 1 trade deal
between the United States and China, the world's biggest oil users, may not boost demand as
Washington intends to keep tariffs on Chinese goods until a second phase.
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF were at 29 cents per barrel over Singapore
quotes on Wednesday, down from 36 cents per barrel a day earlier.
    The January/February time spread for 10 ppm gasoil narrowed on Wednesday to
trade at a premium of 11 cents per barrel, compared with 33 cents a barrel in the previous
session, Refinitiv Eikon data showed.
    
    WARM WINTER, WEAK AVIATION HURT JET FUEL CRACKS
    - Asian refining profit margins for jet fuel have slumped to their lowest in more than eight
months, weighed down by weak aviation demand and a drop in the use of heating oil due to a warm
winter in Northeast Asia.
    - Milder winter temperatures this year have kept a lid on the usual demand uptick from
heating for kerosene, which belongs to the same grade of oil products as jet fuel, especially in
Japan.
    - Refining profits for the aviation fuel were at $12.57 per barrel over Dubai
crude on Wednesday, compared with $11.87 per barrel on Tuesday, their lowest since April 30 last
year.
    - Margins for jet fuel are currently at their weakest levels for this time of the year since
2016, Refinitiv data showed.
    - Temperatures in Tokyo are forecast to remain mostly above normal for the next 45-day
period, weather forecast models on Refinitiv showed. 
    
    FUJAIRAH STOCKS
    - Middle-distillate inventories in the Fujairah Oil Industry Zone rose 17.9% from a week
earlier to 4.3 million barrels in the week to Jan. 13, data via S&P Global Platts showed.

    - Stocks of middle distillates in the Fujairah oil hub averaged 2.4 million barrels in 2019,
compared with a weekly average of 2.8 million barrels in 2018, Reuters calculations showed.
    - Weekly Fujairah middle distillate stocks have more than doubled, when compared with
year-ago levels.
    
    API INVENTORY DATA
    - U.S. crude oil stocks rose in the most recent week while gasoline and distillate
inventories also climbed, data from industry group the American Petroleum Institute showed on
Tuesday.
    - Crude inventories rose by 1.1 million barrels in the week to Jan. 10, to 431.4 million
barrels, compared with analysts' expectations for a draw of 474,000 barrels.
    - Distillate fuel inventories, which include diesel and heating oil, rose by 6.8 million
barrels, compared with expectations for a 1.2 million-barrel increase, the data showed.
    
    SINGAPORE CASH DEALS
    - Two jet fuel trades, two gasoil deals.
    - For more information, click
    
    OTHER NEWS
    - The U.S.-China trade war is set to enter a new, quieter phase on Wednesday as U.S.
President Donald Trump and Chinese Vice Premier Liu He sign an initial trade deal that aims to
vastly increase Chinese purchases of U.S. manufactured products, agricultural goods, energy and
services.
    - Key OPEC countries and their allies have begun discussing a delay until June of a decision
on extending a deal to cut output, Russia's TASS news agency said on Wednesday, citing an
unnamed source.

    
    ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                73.99    -0.04      -0.05       74.03  GO-SIN
 GO 0.5 Diff                      -2.06     0.01      -0.48       -2.07  GO-SIN-DIF
 Spot Gas Oil 0.25%               74.70    -0.04      -0.05       74.74  GO25-SIN
 GO 0.25 Diff                     -1.35     0.01      -0.74       -1.36  GO25-SIN-DIF
 Spot Gas Oil 0.05%               75.84    -0.15      -0.20       75.99  GO005-SIN
 GO 0.05 Diff                     -0.21    -0.10      90.91       -0.11  GO005-SIN-DIF
 Spot Gas Oil 0.001%              76.34    -0.12      -0.16       76.46  GO10-SIN
 GO 0.001 Diff                     0.29    -0.07     -19.44        0.36  GO10-SIN-DIF
 Spot Jet/Kero                    75.56     0.30       0.40       75.26  JET-SIN
 Jet/Kero Diff                     0.11    -0.07     -38.89        0.18  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 Aditya Soni)
  
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