SINGAPORE: Asia’s 10 ppm sulphur gasoil and jet fuel margins fell for the second consecutive month as persistently poor market fundamentals continued to weigh, despite thin trading liquidity.
Demand remains a bearish price driver, as evidenced from the few tenders from importers in southeast Asia to buy March or April material.
Supply remains sufficient entering March as refiners continue to maintain their high rates, aside from scheduled maintenance plans in northeast Asia, including China.
Refining margins for 10 ppm sulphur gasoil closed the last trading session for February at $24.73 per barrel, while jet fuel refining margins were at $23.03 per barrel.
Cash differentials for 10 ppm sulphur gasoil fell by more than 50% month-on-month, reflecting the strong selling interest in the market
Malaysia’s Petco offers March-loading gasoil from Pengerang.
US crude and gasoline inventories likely increased last week, while distillate stockpiles were expected to have fallen, a preliminary Reuters poll showed on Monday. Distillate inventories, which include diesel and heating oil, were expected to have decreased by about 500,000 barrels last week.
Strong pick-up in fuel demand in China and flattish supply from other producers will push the oil market into deficit in the second half of this year, leading OPEC to reverse its production cut at the June meeting, analysts at Goldman Sachs said.