SINGAPORE: Asia’s cash premiums for 10 ppm gasoil rose for a third consecutive session on Wednesday, soaring to their highest level since June 2020, buoyed by expectations for tighter supplies in the near term.
Cash differentials for gasoil with 10 ppm sulphur content were at a premium of 97 cents per barrel to Singapore quotes, compared with 94 cents per barrel a day earlier.
Lower exports from China would keep the regional gasoil market tight as demand is expected to recover further in coming months, trade sources said.
China has more than halved the volume of export quotas for refined fuel under the first allotment for 2022, in line with the government’s recent policy to curb excessive domestic refinery production amid a broad plan to reduce carbon emissions.
Refining margins, also known as cracks, for 10 ppm gasoil rose to a three-week high of $13.73 a barrel over Dubai crude during Asian trading hours on Wednesday, compared with $13.41 a barrel on Tuesday.
Jet fuel refining profits climbed 29 cents to $11.04 per barrel over Dubai crude on Wednesday, their strongest in a week.
Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 22.8% to 1.6 million barrels in the week ended Jan. 3, data via S&P Global Platts showed.
The weekly stocks in Fujairah averaged 3.5 million barrels in 2021, compared with 4.2 million barrels in 2020, Reuters calculations showed.