SINGAPORE: Asia’s cash differentials for 10 ppm gasoil dropped for the ninth consecutive session on Thursday, plunging to their weakest level in more than five months amid sluggish demand, while Singapore middle distillate inventories rose to a four-week high.
Cash differentials for gasoil with 10 ppm sulphur content were at a discount of 44 cents a barrel to Singapore quotes, the widest since Nov. 2.
Refineries ramped up run rates at a pace faster than demand could recover, and now with a sharp resurgence in COVID-19 infections in major markets including India and Japan, the outlook for gasoil has turned further bearish, market watchers said.
The ongoing spring turnarounds at some regional refineries would help tighten supplies to an extent, but demand loss from reimposed lockdowns in several places would weigh on the market, according to trade sources.
Refining profit margins for 10 ppm gasoil rose 38 cents to $6.80 per barrel over Dubai crude during Asian trading hours on Thursday, as feedstock crude oil prices extended their losses into a third session.
Singapore’s middle distillate inventories rose 0.4% to 13.5 million barrels in the week to April 21, according to Enterprise Singapore data.
Weekly Singapore middle distillate inventories have averaged 14.2 million barrels so far this year, compared with an average of 13.9 million barrels in 2020, Reuters calculations showed. This week’s stocks were 6.6% lower than a year earlier.
US distillate stockpiles fell by 1.1 million barrels in the week to April 16, versus expectations for a 956,000-barrel drop, the Energy Information Administration said on Wednesday.
Air traffic will recover more slowly than previously expected from the COVID-19 pandemic, as vaccination delays and government “risk aversion” slow market opening, global airlines body IATA said on Wednesday.
Global traffic this year will amount to 43% of pre-crisis levels based on passenger numbers and distance flown, the International Air Transport Association said, below the 51% it had forecast late last year.
No gasoil deals, no jet fuel trades. Singapore residual fuel oil inventories rose to their highest in nearly five months in the week ended April 21, as elevated net import volumes pushed stock 4% higher on-week while notching the fourth straight weekly gain, official data showed on Thursday.