Asia Distillates-Gasoil time spread hits 2-year high, crack slips

Asia's front-month 10-ppm gasoil time spread climbed to a two-year high on Monday

  

SINGAPORE- Asia's front-month 10-ppm gasoil time spread climbed to a two-year high on Monday, lifted by tight supplies and rising demand for the middle distillate fuel amid a global power crunch.

The front-month time spread hit $1.10 a barrel on Monday, up from 98 cents in the previous session and its highest since October 2019, Refinitiv data in Eikon showed. 

The gasoil refining margin, however, slipped to $15.40 a barrel above Dubai crude, Refinitiv data showed, as crude oil prices scraped new highs. 

Still, the front-month crack was just 24 cents shy of a 22-month high of $15.64 a barrel on Friday, the Refinitiv data showed.

Oil prices hit multi-year highs on Monday buoyed by recovering demand and high natural gas and coal prices encouraging users to switch to fuel oil and diesel for power generation. 

CHINA RUNS

China's diesel and jet exports rebounded in September after touching a more than six-year low in the previous month, as refiners received a fresh batch of fuel export quotas, while jet fuel exports were lifted by improving export margins. 

The country shipped out 780,000 tonnes of diesel last month, up from 540,000 tonnes in August but 35% lower than levels in the same period last year, data from the General Administration of Customs showed on Monday.

Jet kerosene shot up 242% on year to 890,000 tonnes in September, the third-highest monthly rate since May 2020, as Asian refining margins for the aviation fuel hit their strongest levels since the start of 2020 alongside recovering air travel demand.

This came despite a drop in China's daily crude oil processing rate which fell again in September, to the lowest since May 2020, as feedstock shortage and environmental inspection crippled operations at refineries and a power crunch dampened refined oil demand from downstream users. 

(Reporting by Roslan Khasawneh; Editing by Ramakrishnan M.) ((roslan.khasawneh@thomsonreuters.com))


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