Asia Distillates-Gasoil refining margins climb to highest in over 4 months
Asian refining margins for 10 ppm gasoil rose on Tuesday to their strongest in more than four months, partly buoyed by optimism that economies would rebound with accelerated approvals for COVID-19 vaccines. Refining margins, or cracks, for 10 ppm gasoil climbed 63 cents to $6.20 a barrel over Dubai crude during Asian trading hours, their highest since Aug. 6.
Regional gasoil demand is expected to pick up through the remainder of this year and in the first quarter of 2021, primarily led by India, but a resurgence in COVID-19 cases and related restrictions in several other Asian markets might put a dampener on, analysts said. "The economic recovery globally should be sharp and robust due to the extreme low base set in 2020, and the oil price rebound forecast should help to pull diesel prices higher over the next 12 months," said Peter Lee, senior oil and gas analyst at Fitch Solutions. "Although the bulk of the recoveries are expected to occur late in H121 and H221, as key markets continue to struggle with elevated infection rates," Lee added. Cash differentials for gasoil with 10 ppm sulphur content were at a discount of 13 cents a barrel over Singapore quotes on Tuesday, compared with a discount of 22 cents per barrel a day earlier. Meanwhile, cash differentials for jet fuel flipped into a discount of 2 cents a barrel to Singapore quotes on Tuesday, compared with a premium of 3 cents on Monday.
Global air cargo demand was 6.2% lower than previous year's levels in October, the International Air Transport Association (IATA) said on Monday. - Asia-Pacific airlines saw demand for international air cargo drop 11.6% in October year-on-year, but this was a second consecutive month of improvement, the IATA said.
Airlines battered by COVID-19 are prepping for key roles in the mass vaccine rollout that promises to unlock an immediate boost for the sector - and beyond that, its own recovery and survival. Oil prices fell on Tuesday, adding to losses from the previous session that came as California tightened its pandemic lockdown through Christmas and coronavirus cases continued to surge in the United States and Europe.
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