SINGAPORE- Asian refining margins for 10 ppm gasoil slipped on Wednesday, while cash discounts for the industrial fuel widened due to sluggish demand in the physical market.

Refining margins, also known as cracks, for 10 ppm gasoil dipped to $8.57 per barrel over Dubai crude during Asian trading hours, down from $8.65 per barrel a day earlier.

The regional gasoil market remains under pressure as mobility restrictions in several markets have dented demand recovery, while a recent resurgence in coronavirus cases in southern China was fuelling fresh concerns over near-term consumption growth, market watchers said.

"Viral resurgence in Guangdong province of China may be a wild card for energy demand as local authorities have tightened COVID-related measures and limited travel for residents," said Margaret Yang, a strategist at Singapore-based DailyFX.

"If the situation worsens, it may pose a threat to China's energy demand," she added.

Cash differentials for gasoil with 10 ppm sulphur content GO10-SIN-DIF were at a discount of 5 cents per barrel to Singapore quotes on Wednesday.

 

CHINA TELLS PETROCHINA TO STOP TRADING OFF OIL QUOTAS WITH TEAPOTS

- Chinese authorities have ordered a unit of state-run PetroChina to stop trading off crude oil import quotas with local refineries as part of a crackdown on excessive fuel production, a move that could cut the country's crude imports by 3%, sources said. 

- Beijing has stepped up scrutiny of crude oil quota use and imports by state and private firms this year to ease a fuel surplus that has weighed on the sector's profits and led to excess emissions that have undermined China's climate goals, said five industry sources with knowledge of the matter.

 

INVENTORIES

- Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 8.8% to 3.5 million barrels in the week ended June 7, data via S&P Global Platts showe

- The weekly stocks in Fujairah have averaged 3.8 million barrels this year, compared with 4.2 million barrels in 2020, Reuters calculations showed.

- U.S. distillate fuel inventories, which include diesel and heating oil, climbed by 3.8 million barrels in the week to June 4, according to two market sources, citing American Petroleum Institute (API) figures.

 

OTHER NEWS

- Oil prices continued to rally on Wednesday on signs of strong fuel demand in western economies, while the prospect of Iranian supplies returning faded as the U.S. secretary of state said sanctions against Tehran were unlikely to be lifted.

(Reporting by Koustav Samanta; Editing by Subhranshu Sahu) ((koustav.samanta@thomsonreuters.com)(+65 6870 3503)(Reuters Messaging: koustav.samanta.thomsonreuters.com@reuters.net))