January 8, 2020 / 11:15 AM / 12 days ago

Asia Distillates-Gasoil cracks gain, cash premiums edge higher

    SINGAPORE, Jan 8 (Reuters) - Asian refining margins for 10
ppm gasoil climbed on Wednesday, while cash premiums for the
transportation fuel inched higher amid marginally firmer buying
interest for physical cargoes.
    Refining profit margins, also known as crack spreads, for
gasoil with 10 ppm sulphur content rose to $14.54
per barrel over Dubai crude during Asian trading hours, compared
with $14.19 per barrel on Tuesday, their lowest in over three
weeks.
    Traders remain hopeful about a major boost to the gasoil
market over the next few months, driven by demand for marine
gasoil (MGO) in the wake of the recently implemented IMO 2020
rules.
    But, some market participants are concerned it might take
longer to materialize as there are steady supplies of very-low
sulphur fuel oil (VLSFO) available in the market.
    Some ship operators, especially those with larger ships,
strongly prefer VLSFO over MGO because of technical issues
related to running on distillate fuel as opposed to heavy fuels.

    Cash premiums for 10 ppm gasoil GO10-SIN-DIF were at 39
cents per barrel over Singapore quotes on Wednesday, up from 37
cents a barrel on Tuesday.
    Meanwhile, cash premiums for jet fuel JET-SIN-DIF fell to
4 cents per barrel to Singapore quotes on Wednesday, from 9
cents per barrel on Tuesday.
    Refining margins for jet fuel rose to $13.54
per barrel over Dubai crude on Wednesday, up from $13.24 in the
previous session on Tuesday.
    
    INDONESIA ENERGY & TRADE DEALS
    - Indonesian President Joko Widodo will oversee the signing
of $18.8 billion worth of energy and trade deals on a visit to
Abu Dhabi, including Pertamina's deal with Abu Dhabi National
Oil Co to upgrade a West Java refinery, ministers said on
Tuesday.
    - Some of the deals have been under discussions for some
time, while others, such as Pertamina's purchase of LPG from
ADNOC, are new.
    - Widodo will witness the signings this weekend on his first
overseas trip of the year, following an official visit by Abu
Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan to
Indonesia in July.
    
    FUJAIRAH STOCKS
    - Middle-distillate inventories in the Fujairah Oil Industry
Zone dropped 2.1% from a week earlier to 3.6 million barrels in
the week to Jan. 6, 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 fell in the most recent week while
gasoline and distillate inventories rose, data from industry
group the American Petroleum Institute showed on Tuesday.

    - Crude inventories fell by 5.9 million barrels in the week
to Jan. 3, to 430 million barrels, compared with analysts'
expectations for a draw of 3.6 million barrels.
    - Distillate fuel inventories, which include diesel and
heating oil, rose by 6.4 million barrels, compared with
expectations for a 3.9 million-barrel increase, the data showed.
    
    SINGAPORE CASH DEALS
    - Seven gasoil trades, no jet fuel deals.
    - Vitol and CAO were among the most active buyers, while
Winson Oil was the only seller
    - For more information, click
    
    OTHER NEWS
    - Oil markets calmed on Wednesday after prices had jumped to
their highest in months in the wake of a rocket attack by Iran
on American forces in Iraq that raised the spectre of a
spiralling conflict and disrupted crude supplies.
    - The United Arab Emirates' energy minister said on
Wednesday he saw no immediate risk to oil passing through the
vital gateway of the Strait of Hormuz after Iran attacked bases
housing U.S. forces in Iraq.
    - China National Petroleum Corp (CNPC) has pulled out about
20 workers from the West Qurna oilfield in Iraq as tensions in
the region have escalated, a source from the company familiar
with the matter said on Wednesday.

    
    ASSESSMENTS
 MID-DISTILLATES                                                                         
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                80.58     1.16       1.46       79.42  GO-SIN
 GO 0.5 Diff                      -2.07     0.01      -0.48       -2.08  GO-SIN-DIF
 Spot Gas Oil 0.25%               81.23     1.16       1.45       80.07  GO25-SIN
 GO 0.25 Diff                     -1.42     0.01      -0.70       -1.43  GO25-SIN-DIF
 Spot Gas Oil 0.05%               82.53     1.17       1.44       81.36  GO005-SIN
 GO 0.05 Diff                     -0.12     0.01      -7.69       -0.13  GO005-SIN-DIF
 Spot Gas Oil 0.001%              83.04     1.17       1.43       81.87  GO10-SIN
 GO 0.001 Diff                     0.39     0.02       5.41        0.37  GO10-SIN-DIF
 Spot Jet/Kero                    81.54     0.94       1.17       80.60  JET-SIN
 Jet/Kero Diff                     0.04    -0.05     -55.56        0.09  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 Maju Samuel)
  
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