SINGAPORE: Asian refining margins for 10 ppm gasoil slipped to their lowest in over a week on Monday, despite weaker feedstock crude prices, as traders were concerned the fast-spreading Omicron coronavirus infections would likely threaten short-term demand.

Refining margins, also known as cracks, for 10 ppm gasoil dropped to $12.84 a barrel over Dubai crude during Asian trading hours, the lowest since Dec. 9. They were at $13.24 per barrel on Friday.

“With a closed east-west arbitrage, diesel cargoes heading to the West have thinned in recent weeks amidst ample supplies in Europe,” said Serena Huang, Asia lead analyst at Vortexa. This was partially casting a bearish outlook on Asia’s gasoil cracks in the short-term, she added.

The front-month exchange of futures for swaps (EFS) traded around minus $7.75 a tonne on Monday, a level that typically makes the arbitrage unworkable.

Cash premiums for gasoil with 10 ppm sulphur content fell 5 cents to 57 cents per barrel to Singapore quotes on Monday, while the Jan/Feb time spread or the fuel grade narrowed its contango by 8 cents to trade at 54 cents per barrel.

China’s diesel exports in November plunged 69% from a year ago as refineries prioritised domestic supply to ease a fuel crunch, while gasoline exports also dropped.

Diesel shipments were 600,000 tonnes last month, though that was up from 560,000 tonnes in October, data from General Administration of Customs showed on Saturday.

State-backed oil refineries have raised oil processing rates and increased output of diesel amid a supply crunch of the fuel in recent months.

No jet fuel trades, no gasoil deals. Australia has raised its outlook for mining and energy export earnings to a record A$379 billion ($272 billion) for the current fiscal year as coal and gas shortages in China and Europe pump up prices, the government said on Monday.