SINGAPORE: Asian refining margins for 10 ppm gasoil surged to a fresh record high on Friday, lifted by weaker feedstock crude prices, low inventories and expectations for firmer Chinese demand in the near term due to easing COVID restrictions.
Refining profit margins, also known as cracks, for 10 ppm gasoil soared to $53.05 per barrel over Dubai crude during Asian trading hours, a fresh all-time high, according to Refinitiv Eikon data that goes back to 2014. The cracks, which were at $49.82 per barrel on Thursday, have jumped 25.7% this week in their second consecutive weekly rise, and the biggest weekly gain since mid-April, Refinitiv Eikon data showed.
Singapore’s middle distillate inventories have dropped to a four-week low this week, staying about 39% lower compared with the corresponding week a year ago, while the inventories in UAE’s Fujairah Oil Industry Zone were about 34% lower compared with a year earlier.
While a recent reduction in excise duties would likely boost India’s domestic consumption for diesel, the upcoming peak monsoon season typically dents transportation fuel demand, leading to a rise in exports from the country, trade sources said.
Cash premiums for gasoil with 10 ppm sulphur content dropped to $5.05 a barrel to Singapore quotes on Friday, down from $5.82 per barrel in the previous session.
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp refining and storage hub dipped 1.1% to 1.5 million tonnes in the week ended June 2, according to Dutch consultancy Insights Global.
ARA jet fuel inventories inched down 0.2% this week to 802,000 tonnes. US distillate inventories, which include diesel and heating oil, fell by 530,000 barrels in the week to May 27, versus expectations for a 990,000-barrel rise, the Energy Information Administration said on Thursday.