Asia Distillates-Gasoil cash premiums surge to over 13-month high
Asia's cash premiums for 10 ppm gasoil rose for a fourth consecutive session on Friday, soaring to their highest level in over a year, buoyed by active buying interests in the physical market and strong arbitrage demand from Europe. Cash differentials for gasoil with 10 ppm sulphur content surged to a premium of 31 cents per barrel to Singapore quotes, a level not seen since late-July 2020.
Asia's gasoil market has found a cushion, despite lacklustre regional demand on the back of rampaging Delta variant outbreaks, as Europe enters peak demand season and sucks up cargoes for restocking heating oil ahead of winter months. Traders and industry analysts expect a stronger pull for Asian barrels from Europe in the next few weeks due to lack of U.S. supplies after Hurricane Ida struck the Gulf coast last weekend and shuttered or curtailed output at six refineries in Louisiana. Refining profit margins, also known as cracks, for 10 ppm gasoil jumped 30 cents to $9.81 per barrel over Dubai crude during Asian trading hours, their strongest since end-March last year. Cracks for the benchmark gasoil grade in Singapore have climbed 9% this week, in a second straight weekly rise, Refinitiv Eikon data showed.
Gaoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub slipped 0.2% to 2.06 million tonnes in the week ended Sept. 2, according to Dutch consultancy Insights Global. - ARA jet fuel inventories rose 4.6% this week to 1.03 million tonnes. LNG - Liquefied natural gas (LNG) buyers with long-term contracts are asking their suppliers for extra volumes of the super-chilled fuel pegged to oil prices which are currently much lower than spot prices, several trade and industry sources told Reuters. - Some have requested to load bigger cargoes bought under their long-term contracts instead of turning to the spot market to buy additional cargoes, or have asked for earlier delivery of the cargoes, the sources said.
Oil prices were largely steady on Friday as a rebound in global demand was widely expected but a slow recovery for the U.S. Gulf Coast export and refining hub from the hurricane earlier this week weighed on prices. - The U.S. Environmental Protection Agency said on Thursday it has dispatched a surveillance aircraft to an area in Louisiana hard hit by Hurricane Ida that includes a refinery where an apparent oil spill has been reported.
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