SINGAPORE: Asia’s 10-ppm sulphur gasoil and jet fuel margins posted gains for the second consecutive year helped by strong market fundamentals, with limited supply from China before fresh export quotas were released in September.

Refining margins closed 53 cents higher at $37.99 a barrel on Friday, while jet fuel refining margins rose in tandem to end the session at $37.89 a barrel.

Gasoil margins have increased 1.4% and jet fuel margins have risen by nearly four-fold this year from 2021.

Margins for both jet fuel and 10-ppm sulphur gasoil rose to their highest level for the year around mid-June, bolstered by strong demand-supply fundamentals amid air travel recovery and tighter supplies then.

Support from the West from end-September to October continued to buoy the Asian market, even though margins declined slightly.

Major regional refineries started maximising output for these two products after the peak season for gasoline demand ended, given the better profitability.

However, towards end-2022, margin gains slowed down as China’s oil product export volumes for November went back to 2021 highs, after a fresh set of quotas released by the government boosted supplies.

The sentiment was also weighed on by rising stock levels in the West, with talks among industry sources of large Russian volumes heading into northwest Europe in January-February next year.