Asian refining margins for 10 ppm gasoil rose for a fourth consecutive session on Friday, surging to an all-time high on expectations for a tighter market in the near term. Refining profit margins, or cracks, for 10 ppm gasoil soared to $25.95 a barrel over Dubai crude during Asian trading hours, up from the previous high of $23.09 per barrel a day earlier.
Cracks for the benchmark gasoil grade in Singapore have jumped 40% this week, their biggest weekly gain since October 2020, Refinitiv Eikon data showed. Refining profits are surging globally on fears of a potential gasoil shortage, as buyers avoid Russian supplies, and an already tight Asian gasoil market is expected to attract even stronger arbitrage demand from the West in the coming days, trade sources said. “Russia’s invasion of Ukraine has resulted in sanctions limiting its participation in the oil market and global financial system, potentially curbing its supply of 2 million tonnes per month of diesel to Europe and the Americas, resulting in an extremely bullish prompt spot market,” Zameer Yusof, senior analyst at Refinitiv Oil Research said in a note.
“This will likely lead to long-haul Westbound arbitrage runs to eventually pull barrels out of Asia, further tightening the cash market,” he added cash premiums for gasoil with 10 ppm sulphur content GO10-SIN-DIF rose to $4.89 a barrel to Singapore quotes, a level not seen since Singapore’s benchmark gasoil grade was shifted to 10ppm in January 2018, from 500ppm earlier. They were at a premium of $4.45 per barrel onThursday. The March/April time spread for 10 ppm gasoil widened its backwardation further on Friday to trade at $6.50 per barrel, compared with $6 a barrel on Thursday.
ARA INVENTORIES
– Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp refining and storage hub STK-GO-ARA rose 4.9% to 1.7 million tonnes in the week ended March 3, according to Dutch consultancy Insights Global.
– Gasoil stocks have risen on the back of higher imports, Insights Global’s Lars van Wageningen said, adding that buyers were likely stockpiling on expectations of disruptions toRussian supplies.
– ARA jet fuel inventories STK-JET-ARA climbed 2.6% this week to 857,000 tonnes.
SINGAPORE CASH DEALS
– No gasoil deals, no jet fuel trades
Source: Reuters (Reporting by Koustav Samanta;Editing by Vinay Dwivedi)