March 4, 2019 / 11:13 AM / 2 months ago

Asia Distillates-Jet fuel cracks dip; market eyes tighter supply

    SINGAPORE, March 4 (Reuters) - Asian refining margins for jet fuel eased on Monday amid
firmer crude prices, but traders were expecting the market to tighten over the next few weeks
due to ongoing spring turnarounds at some regional refineries. 
    Refining margins, also known as cracks, for jet fuel slipped to $14.54 a barrel
over Dubai crude during Asian trading hours, compared with $14.87 a barrel on Friday. Jet cracks
gained about 7 percent last week. 
    Crude oil prices rose on Monday, buoyed by output cuts by producer club OPEC and reports
that the United States and China are close to a deal to end a bitter tariff row that has slowed
global economic growth.
    Cash differentials for jet fuel JET-SIN-DIF were at a discount of 29 cents a barrel to
Singapore quotes on Monday, compared with a discount of 27 cents a barrel on Friday.
    The physical jet fuel market in the Singapore window remained muted with no deals on Monday,
trade sources said.
    Meanwhile, cash discounts for 10ppm gasoil GO10-SIN-DIF widened to 28 cents a barrel to
Singapore quotes, hurt by weaker deals in the physical market, and traders said the market has
lost some steam after Singapore middle distillate stocks climbed to a five-week high last week.
    Singapore's onshore inventories for middle distillate rose by 31,000 barrels in the week to
Feb. 27 in a second straight week of builds, data from Enterprise Singapore showed on Thursday. 

    The wider gasoil market in the region, however, is expected to get some support this year
from stronger demand in India, which is one of the key players in the region, trader sources
said.
    India's diesel consumption may rise to a record in 2019 on increasing infrastructure
spending by the current government as it tries to hold off challengers in general elections that
will be held over April and May.
    Surging diesel consumption in India, the world's third-largest oil user, underscores the
country's importance as a driver of global oil demand. Amid increasing concerns that crude
demand growth may slip in 2019 because of slowing economic growth, India's burgeoning fuel
consumption may help underpin prices.
    India's strong diesel consumption would also likely result in lesser barrels of the
transportation fuel coming out of the country, helping keep the wider Asian supply under check,
market watchers said.
    Refining margins for gasoil with 10ppm sulphur content dipped to $16.14 a
barrel over Dubai crude on Monday, down from $16.32 a barrel on Friday.

            
    TENDERS
    - Sri Lanka's Ceylon Petroleum Corp (Ceypetco) is seeking a combined cargo of 472,500
barrels of 10ppm gasoil, 1.17 million barrels of 500ppm gasoil and about 1.22 million barrels of
92 RON gasoline for delivery during the eight months between July 15, 2019 and March 14, 2020,
according to a tender notice issued on Friday.
    - The total volumes would comprise of nine cargoes of 52,500 barrels of 10ppm gasoil,
130,000 barrels of 500ppm gasoil and 135,500 barrels of 92 RON gasoline for delivery at Dolphin
Tanker Berth and SPM Muthurajawela, Colombo on a DAP basis.
    - The tender closes on April 2 and will be valid for a period of 90 days therefrom.
    - For more information, please click   
     
    
    SINGAPORE CASH DEALS
    - Five gasoil deals, no jet fuel trades.
    - Vitol bought 150,000 barrels of 10ppm gasoil from Trafigura for March 19-23 loading, at a
discount of 35 cents a barrel to Singapore quotes.
    - Winson Oil bought 150,000 barrels of 10ppm gasoil from Total for March 19-23 loading, at a
discount of 35 cents a barrel to Singapore quotes.
    - Winson bought another 150,000 barrels of 10ppm gasoil from Trafigura for March 19-23
loading, at a discount of 30 cents a barrel to Singapore quotes.
    - Hin Leong sold 155,000 barrels of 10ppm gasoil to Vitol for March 25-29 loading, at a
discount of 30 cents a barrel to the balance of March Singapore quotes.
    - Vitol bought 150,000 barrels of 500ppm gasoil from Unipec for March 19-23 loading, at a
discount of $1.25 a barrel to Singapore quotes.
    - For more information, please click   
    
    
    OTHER NEWS
    - Russian oil output stood at 11.34 million barrels per day (bpd) in February, down some
75,000 barrels per day from the October level, the baseline for a global deal, but still missing
the accord target, Energy Ministry data showed on Saturday.
    - OPEC oil supply fell to a four-year low in February, a Reuters survey found, as top
exporter Saudi Arabia and its Gulf allies over-delivered on the group's supply pact while
Venezuelan output registered a further involuntary decline.

    
    ASSESSMENTS
 MID-DISTILLATES                                                                             
 CASH ($/T)             ASIA CLOSE         Change   % Change    Prev Close   RIC
 Spot Gas Oil 0.5%                  78.96    -1.62       -2.01        80.58  GO-SIN
 GO 0.5 Diff                        -2.30    -0.04        1.77        -2.26  GO-SIN-DIF
 Spot Gas Oil 0.25%                 79.36    -1.70       -2.10        81.06  GO25-SIN
 GO 0.25 Diff                       -1.90    -0.12        6.74        -1.78  GO25-SIN-DIF
 Spot Gas Oil 0.05%                 80.16    -1.81       -2.21        81.97  GO005-SIN
 GO 0.05 Diff                       -1.10    -0.23       26.44        -0.87  GO005-SIN-DIF
 Spot Gas Oil 0.001%                80.98    -1.74       -2.10        82.72  GO10-SIN
 GO 0.001 Diff                      -0.28    -0.16      133.33        -0.12  GO10-SIN-DIF
 Spot Jet/Kero                      79.21    -1.64       -2.03        80.85  JET-SIN
 Jet/Kero Diff                      -0.29    -0.02        7.41        -0.27  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 Louise Heavens)
  
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