SINGAPORE: Asian refining margins for 10ppm gasoil rose on Monday to their highest levels in nearly three months, but cash differentials for the industrial fuel flipped back into discounts due to weaker buying interest for physical cargoes.
Refining margins, or cracks, for gasoil with 10ppm sulphur content climbed to as high as $15.34 a barrel over Dubai crude during Asian trading hours, the highest since March 8.
The cracks for the benchmark gasoil grade in Singapore were at $14.08 a barrel on Friday.
Crude oil prices held steady on Monday following last week's heavy losses, as deepening US trade wars fanned fears of a global economic slowdown but top oil exporter Saudi Arabia sought to calm markets.
Cash differentials for 10ppm gasoil were at a discount of 2 cents a barrel to Singapore quotes, compared with a premium of 3 cents per barrel on Friday.
Meanwhile, cash discounts for jet fuel narrowed to 8 cents a barrel to Singapore quotes, compared with a discount of 16 cents per barrel in the previous session.
Refining profit margins for jet fuel were at $14.05 a barrel over Dubai crude on Friday, up from $13.09 a barrel on Friday.
The June/July time spread for jet fuel narrowed its contango structure by a cent to be at a discount of 1 cent a barrel on Monday.
In a contango market structure, prompt prices are lower than those for future delivery, which tends to encourage holders of physical barrels to store them and sell later to secure higher prices.
A narrowing contango indicates the market may flip back into backwardation - the opposite of contango that is usually seen as a sign that there is demand for product and the market is rebalancing.
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