Asia Distillates-Gasoil cash differentials climb to over 9-month high

Asia's cash differentials for 10 ppm gasoil rose on Monday to their highest level in more than nine months

  

SINGAPORE- Asia's cash differentials for 10 ppm gasoil rose on Monday to their highest level in more than nine months, buoyed by firmer buying interests for physical cargoes.

Cash differentials for gasoil with 10 ppm sulphur content GO10-SIN-DIF , which flipped into a positive territory last week, rose to a premium of 22 cents per barrel to Singapore quotes. They were at a 10-cent premium on Friday.

Refining margins, also known as cracks, for 10 ppm gasoil rose 52 cents to $8.54 per barrel over Dubai crude during Asian trading hours, a level not seen since April last year.

The cracks, however, are expected to come under pressure due to increased supplies from India and South Korea in the near term, trade sources said.

China said on Friday it will levy a consumption tax on imports of several fuel blending components, including light cycle oil (LCO), mixed aromatics and diluted bitumen, effective from June 12. 

The move would mainly affect the high-sulphur gasoil markets as Korean refiners now will likely produce less LCO and more gasoil, a Singapore-based trader said.

The front-month time spread for 10 ppm gasoil GO10SGSPDMc1 widened its backwardation to trade at 10 cents per barrel on Monday.

CHINA APRIL CRUDE THROUGHPUT CLIMBS

- China's crude oil throughput rose 7.5% in April from the same month a year ago, but remained off the peak seen in the last quarter of 2020 as several state-run oil refineries carried out maintenance amid thin margins and high fuel products stocks. 

- The country processed 57.9 million tonnes of crude oil in April, data from the National Bureau of Statistics (NBS) showed on Monday, equivalent to 14.09 million barrels per day (bpd). For the first four months of 2021, throughput was 232.1 million tonnes, or 14.12 million bpd, up 14% from a year earlier.

OTHER NEWS

- Oil prices were little changed on Monday, trading in a tight range as European economic reopenings offset gloom from surging COVID-19 cases in Asia, fresh restrictions and underwhelming Chinese manufacturing data.

- Australia has agreed to pay its last two oil refineries up to A$2.3 billion ($1.8 billion) through 2030 to keep the struggling plants open and protect the country's fuel security. 

(Reporting by Koustav Samanta; editing by Uttaresh.V) ((koustav.samanta@thomsonreuters.com)(+65 6870 3503)(Reuters Messaging: koustav.samanta.thomsonreuters.com@reuters.net))

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