SINGAPORE- Asian refining profit margins for 10 ppm gasoil dipped on Thursday, but hovered near their strongest levels since early last year, while middle distillate inventories in Singapore plunged to a 22-month low.
Traders said any downside to the market would be limited in the near term as Chinese exports are expected to remain low through the end of this year, while incremental supplies emerging from other markets would be used up by recovering industrial demand.
Refining margins, also known as cracks, for 10 ppm gasoil dipped to $14.49 per barrel over Dubai crude during Asian trading hours, 32 cents lower from a day earlier.
Cracks for the benchmark gasoil grade in Singapore are currently about 11% higher compared with their five-year seasonal average for this time of the year, Refinitiv Eikon data showed.
Cash premiums for gasoil with 10 ppm sulphur content GO10-SIN-DIF rose by 6 cents to 70 cents per barrel to Singapore quotes, a level last seen in July 2020.
- Singapore's middle distillate inventories dropped 5.1% to 9.8 million barrels in the week to Oct. 20, a level not seen since Jan. 8, 2020, according to Enterprise Singapore data.
- Weekly Singapore middle distillate inventories have averaged 12.6 million barrels this year, compared with an average of 13.9 million barrels in 2020, Reuters calculations showed. This week's stocks were 33.8% lower than a year earlier.
- U.S. distillate inventories, which include diesel and heating oil, fell by 3.9 million barrels in the week to Oct. 15, putting the stocks at their lowest levels since April 2020, the Energy Information Administration said on Wednesday.
- Information services provider S&P Global Platts said it would launch new sustainable aviation fuel (SAF) and hydrotreated vegetable oil (HVO) valuations in China, based on its used cooking oil (UCO) North Asia assessment, effective Dec. 1, 2021.
- "The growing refining capacity for advanced biofuels in China will make the region an important production hub in the future," Platts said in a note to clients.
SINGAPORE CASH DEALS
- Four 10ppm gasoil deals, no jet fuel trades
- Oil hit a three-year high above $86 a barrel on Thursday driven by tight supply and a global energy crunch, although prices eased as some investors took profits on signs the rally is looking overstretched.
(Reporting by Koustav Samanta; Editing by Ramakrishnan M.) ((email@example.com ( +65 6870 3503)(Reuters Messaging: firstname.lastname@example.org))