Asia distillates-gasoil buyers get smallest cash discounts in nearly four months
SINGAPORE, Dec 10 (Reuters) - Asia's cash differentials for 10 ppm gasoil inched up on Thursday, hitting a near four-month high, while middle distillate inventories in Singapore dropped to a five-week low.
Cash discounts for gasoil with 10 ppm sulphur content <GO10-SIN-DIF> narrowed to 8 cents a barrel to Singapore quotes, the smallest discounts since the differentials plunged to a negative territory on Aug. 11.
The December-January time spread for 10 ppm gasoil in Singapore remained unchanged at zero for a second straight session, Refinitiv Eikon data showed. Refining margins, or cracks, for 10 ppm gasoil dropped 60 cents to $5.80 a barrel over Dubai crude during Asian trading hours, partly weighed down by firmer raw material crude prices and expectations for ample near-term supplies.
"We see gasoil cracks trend sideways through to the end of the year," said Philip Jones-Lux, energy market analyst at consultancy JBC Energy. "Chinese crude intake is set to remain at or near record highs, and with plentiful product export quotas remaining, a flood of Chinese diesel into the Asian market could be a major dampener to cracks going forward" he added.
Cracks for the benchmark gasoil grade in Singapore, which have gained 42.5% over the last two months, are still currently at their weakest seasonal levels on record.
INVENTORIES
- Singapore's middle distillate inventories fell 5.2% to 15.05 million barrels in the week to Dec. 9, according to Enterprise Singapore data.
- Weekly Singapore middle distillate inventories have averaged about 13.8 million barrels so far in 2020, Reuters calculations showed. This week's stocks were 40.5% higher from a year ago.
- U.S. distillate stockpiles rose by 5.2 million barrels in the week to Dec. 2, compared with expectations for a 1.4 million-barrel rise, the U.S. Energy Information Administration data showed on Wednesday.
SINGAPORE CASH DEALS - No gasoil deals, no jet fuel trades OTHER NEWS - Oil prices edged up on Thursday, buoyed by a COVID-19 vaccine rollout in Britain and the imminent approval of a vaccine in the United States that could spur a rebound in fuel demand, while a large build in U.S. crude stocks last week held gains in check.
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