SINGAPORE- Asian cash premiums for 10 ppm gasoil climbed on Monday amid active buying interests in the physical market, while refining margins for the industrial fuel grade dropped despite weaker feedstock crude prices. Traders were concerned that reimposed restrictions to curb China's recent surge in coronavirus infections would weigh on the region's near-term demand recovery.
China's financial hub of Shanghai launched a two-stage lockdown of its 26 million people on Monday, closing bridges and tunnels, and restricting highway traffic in a scramble to contain surging COVID-19 cases. Cash differentials for gasoil with 10 ppm sulphur content were at a premium of $6.33 a barrel to Singapore quotes, the highest since March 11. They were at a premium of $6.22 per barrel on Friday. Refining margins, also known as cracks, for 10 ppm gasoil slipped to $32.55 a barrel over Dubai crude during Asian trading hours, compared with $33.80 a barrel at the end of last week.
SINOPEC INVESTMENT PLANS
- China Petroleum & Chemical Corp, better known as Sinopec, is planning its highest capital investment in history for 2022 after recording its best profit in a decade, echoing Beijing's call for energy companies to raise production.
- Sinopec expects to spend 198 billion yuan ($31.10 billion) in 2022, up 18% from a year ago, beating the previous record of 181.7 billion yuan set in 2013, according to a company statement filed to the Shanghai Stocks Exchange on Sunday.
- It plans to invest 81.5 billion yuan in upstream exploitation, especially the crude oil bases in Shunbei and Tahe fields, and natural gas fields in Sichuan province and the Inner Mongolia region.
SINGAPORE CASH DEALS
- One gasoil deal, no jet fuel trades OTHER NEWS
- Oil prices tumbled more than $5 on Monday as fears over weaker fuel demand in China grew after financial hub Shanghai launched a two-stage lockdown to contain a surge in COVID-19 infections.
- Oil producers who felt like outcasts at the COP 26 climate conference last year are now being treated like superheroes because their supplies are in strong demand, UAE energy minister Suhail al-Mazrouei said on Monday at an industry event.
(Reporting by Koustav Samanta; Editing by Aditya Soni)