SINGAPORE: Asian refining margins for 10 parts per million (ppm) gasoil rose on Tuesday, but firmer crude prices and concerns over ample short-term supplies kept a lid on gains.
Refining margins, or cracks, for gasoil with 10ppm sulphur content gained to $15.20 a barrel over Dubai crude during Asian trade, compared with $14.71 per barrel a day earlier.
Crude oil prices firmed on Tuesday as supply cuts led by producer club OPEC and US sanctions on Iran and Venezuela's fuel exports outweighed concerns about an economic slowdown.
The gasoil supply in Asia is expected to climb in the near term as refineries shut for spring turnarounds return, while China continues to bring more barrels to the market with larger export quotas, trade sources said.
China's diesel exports in April surged 43pc from a year earlier, customs data showed on Thursday.
Earlier this month, the country issued a second batch of refined fuel export quotas for 2019, that is 30pc higher than the first batch.
But some refinery maintenance in Japan and India over June might help boost the overall refining margins, market watchers said.
Cash differentials for 10ppm gasoil narrowed their discounts to 4 cents a barrel to Singapore quotes on Tuesday, from a 7-cent discount on Monday.
Meanwhile, cash discounts for jet fuel were at 32 cents a barrel to Singapore quotes, compared with a discount of 31 cents in the previous session.
Jet fuel refining margins rose to $13.95 a barrel over Dubai crude, from $13.56 a barrel on Monday.
Hengli Petrochemical wants to be China's first private exporter of jet fuel, a Hengli spokesman and other company sources said, but the move against the dominance of state oil companies requires licensing and approvals that will be hard to come by.
Hengli, initially a petrochemicals maker, is ramping up a 400,000 barrels-per-day (bpd) oil refinery in the port city of Dalian to full capacity after a December startup.
The oil market is expected to be in balance towards the end of 2019, as global inventories fall and demand remains strong, but OPEC's job is not done yet, Kuwait's oil minister told Reuters.
There are still uncertainties around oil demand growth due to concerns about the impact of the US/China trade dispute on global economy, while US shale oil production is still rising, Khaled al-Fadhel said on Monday.
Comments
Comments are closed.