SINGAPORE: Asian refining margins for 10 ppm gasoil jumped to their strongest level in nearly three months on Wednesday, buoyed by expectations for firmer industrial demand, while regional supplies remain tight.

Refining margins, also known as cracks, for 10 ppm gasoil climbed to $15.37 a barrel over Dubai crude during Asian trading hours, a level not seen since Oct. 18. They were at $14.40 per barrel a day earlier.

Cash premiums for gasoil with 10 ppm sulphur content rose by a cent on Wednesday to 79 cents per barrel to Singapore quotes.

The prompt-month time spread for the benchmark gasoil grade in Singapore remained in backwardation to trade at 90 cents per barrel on Wednesday, compared with 91 cents per barrel on Tuesday.

Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 24.4percent to 1.2 million barrels in the week ended Jan. 10, data via S&P Global Platts showed. US distillate inventories, which include diesel and heating oil, rose by 3 million barrels in the week ended Jan. 7, according to market sources, citing American Petroleum Institute figures. India’s fuel consumption in December scaled a nine-month peak, government data showed on Tuesday, although a fresh coronavirus wave may slow the gradual recovery of demand in the world’s third biggest oil consumer.

Consumption of diesel, accounting for about 40percent of India’s refined fuel sales, grew 12.2percent month-on-month to 7.31 million tonnes, their highest since December 2019, and 1.6percent from the same period last year. Two jet fuel deals, no gasoil trades.

Oil prices hit two-month highs on Wednesday on tight supply and easing concerns about the potential hit to demand from the Omicron coronavirus variant.

Exxon Mobil Corp said on Tuesday it bought a 49.9percent stake in Norwegian biofuels company Biojet AS, as it looks to grow investments in its low-carbon business to meet its targets for reducing greenhouse gas emissions.