Asia distillates-gasoil cracks climb amid hopes for stronger demand
Asian refining margins for 10 ppm gasoil rose on Monday, hovering close to multi-month highs touched last week, buoyed by expectations for firmer demand and tighter supplies in coming months.
Refining margins, also known as cracks, for 10 ppm gasoil climbed to $7.34 per barrel over Dubai crude during Asian trading hours, compared with $7.01 a barrel in the last trading session on Thursday. Cracks for the benchmark gasoil grade in Singapore have surged 22.7% so far this month, Refinitiv Eikon data showed.
The regional gasoil market is expected to strengthen further as countries roll out wider vaccinations in coming days that would boost economic recovery and fuel demand, market watchers said. Cash differentials for gasoil with 10 ppm sulfur content were at a narrow premium of $0.01/bbl to Singapore quotes, compared with a discount of $0.04/bbl on Thursday.
FUEL DEMAND ON TRACK TO PRE-PANDEMIC LEVELS
Global oil and fuel prices are picking up as demand returns to pre-pandemic levels amid easing coronavirus lockdowns in key countries like China and India and signs of increasing road travel in several countries. However, there are questions over how quickly refiners with idled capacity can respond to increased demand. Analysts say the recovery pace will vary by region and fuel type, and that jet fuel demand will remain the weakest performer until more international air travel resumes.
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