SINGAPORE: Asian refining margins for 10 ppm gasoil rose on Friday, and posted a weekly gain of 19%, buoyed by recovering demand amid limited regional supplies.
The gasoil cracks, however, have shed about 40% since hitting a record high of $44.04 earlier this month as some Asian refiners ramped up output or delayed planned maintenance to cash in on higher profits.
Refining margins or cracks for 10 ppm gasoil rose to $26.47 a barrel over Dubai crude during Asian trading hours, up from $25.68 per barrel in the previous session.
Lower exports from China are expected to provide a cushion to the gasoil cracks in the near term, but the country’s recent COVID-19 outbreak was weighing on demand prospects, market watchers said.
China’s diesel exports were at 420,000 tonnes in the first two months of 2022, down from 3.43 million tonnes a year ago, customs data showed on Friday.
Cash premiums for gasoil with 10 ppm sulphur content rose to $4.29 a barrel to Singapore quotes, compared with $4.20 per barrel a day earlier.
Air travel in Asia remains “heavily” compromised by COVID-19 restrictions, but recent easing of curbs in countries such as India and Malaysia was helping traffic to recover, the International Air Transport Association (IATA) said on Thursday.
“As population immunity grows, more governments are managing COVID-19 through surveillance, as they do for other endemic viruses. That is great news for a growing number of destinations that will receive a much-needed economic boost from the upcoming Eastern and Northern Summer travel seasons,” IATA’s Director General Willie Walsh said in a statement.
“Asia is the outlier. Hopefully, recent relaxations including Australia, Bangladesh, New Zealand, Pakistan, and the Philippines are paving the way towards restoring the freedom to travel that is more broadly enjoyed in other parts of the world.”
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp refining and storage hub dropped 2.1% to 1.6 million tonnes in the week ended March 17, according to Dutch consultancy Insights Global. ARA jet fuel inventories rose 6.9% this week to 894,000 tonnes.
Oil prices extended their gains on Friday at the end of a third volatile week of trade after slim progress in peace talks between Russia and Ukraine raised the spectre of tighter sanctions and a prolonged disruption to oil supply.
China’s retail gasoline prices have been hiked to levels not seen since at least 2006 while diesel prices were increased to a decade-high after global oil benchmarks surged in the wake of Russia’s invasion of Ukraine.
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