Asia Distillates: Gasoil cash premiums hold close to multi-year peak on tight supplies

SINGAPORE: Asia’s cash premiums for 10 ppm gasoil inched lower on Thursday, but stayed near a multi-year high touched in the previous session amid limited supplies.

Cash premiums for gasoil with 10 ppm sulphur content, which have surged nearly 40% in the last two weeks, were at $1.93 a barrel to Singapore quotes on Thursday. The differentials hit $2.07 per barrel on Wednesday, a level not seen since October 2017.

Middle distillate inventories in Singapore have plunged to a four-week low this week, Enterprise Singapore data showed on Thursday.

Global supplies of diesel are dwindling as refiners are struggling to keep pace with rapid post-pandemic demand recovery, exacerbating an acute global energy shortage which has already sent the prices of gas, coal and crude oil soaring.

Refining margins, or cracks, for 10 ppm gasoil climbed to $17.77 a barrel over Dubai crude during Asian trading hours, up from $16.52 per barrel a day earlier.

Singapore’s middle distillate inventories plunged 9.4% to 7.4 million barrels in the week to Feb. 9, according to Enterprise Singapore data.

Weekly Singapore middle distillate inventories have averaged about 8 million barrels so far this year, compared with an average of 11.8 million barrels in 2021, Reuters calculations showed. This week’s stocks were 48.6% lower than a year earlier.

US distillate stockpiles fell by 929,000 barrels in the week to Feb. 4, versus expectations for a 1.7 million-barrel drop, the Energy Information Administration said on Wednesday.

India’s fuel consumption fell in January after scaling a nine-month peak in December, government data showed on Wednesday, as COVID-19 curbs in several states hit mobility and industrial activity. Consumption of diesel, which accounts for about 40% of India’s refined fuel sales, fell 12.8% month-on-month to 6.37 million tonnes, and was down about 8.4% compared with January 2020.