Asia Distillates-Gasoil refining margins dip, cash discount widens
3/5/2019 1:37:53 PM
SINGAPORE, March 5 (Reuters) - Asian refining margins for 10 ppm gasoil slipped, while weaker buying interest in the physical market pushed cash differentials for the industrial fuel lower.
Refining margins or cracks for gasoil with 10ppm sulfur content were at $15.99 a barrel over Dubai crude during Asian trade, 15 cents lower from Monday's $16.14 per barrel.
Cracks for the region's benchmark gasoil grade, however, have gained about 15 percent in the last one month, and are seasonally at their highest levels since 2015, Refinitiv Eikon data showed. Despite a few gasoil shipments towards the West from Asia last month, the arbitrage window is not quite open at the moment, trade sources said, as Singapore cracks are quite strong and the region's supplies are tightening with seasonal refinery turnarounds picking up.
The exchange of futures for swaps (EFS), which determines the gasoil price spread between Singapore and North West Europe, narrowed to around minus $16 per tonne on Tuesday, according to Refinitiv Eikon data.
The arbitrage is usually profitable when the EFS trades at about minus $18 a tonne or below, traders said. Cash discounts for 10ppm gasoil GO10-SIN-DIF were at 29 cents a barrel to Singapore quotes on Tuesday, compared with a 28-cents discount a day earlier.
Meanwhile, cash discounts for jet fuel JET-SIN-DIF remained unchanged at 29 cents a barrel to Singapore quotes as the physical market in the Singapore window remained quiet with no bids or deals on Tuesday. Jet fuel refining margins dropped to $14.12 a barrel over Dubai crude on Tuesday, compared with $14.54 a barrel on Monday.
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