Asia Distillates-Gasoil cracks linger near multi-month peak, cash premiums rise

Asian refining margins for 10 ppm gasoil dipped on Monday

  

SINGAPORE- Asian refining margins for 10 ppm gasoil dipped on Monday, but stayed within close sight of a multi-month high touched in the previous session, while cash premiums for the industrial fuel grade rose on firmer buying interests for physical cargoes.

Refining margins, also known as cracks, for 10 ppm gasoil slipped to $10.47 per barrel over Dubai crude during Asian trading hours, down 4 cents from Friday, when it hit the highest since March-end last year.

Cash premiums for gasoil with 10 ppm sulphur content were at 37 cents per barrel to Singapore quotes on Monday, compared with a 34-cent premium on Friday.

Meanwhile, cash premiums for jet fuel rose to 10 cents per barrel to Singapore quotes, compared with a premium of 4 cents a barrel on Friday.

"The jet fuel segment across Asia is beginning to show signs of life, as strict restrictions are starting to be lifted, although any significant lifting of measures have been challenged by fresh threats from the Delta variant," said Peter Lee, senior oil and gas analyst at Fitch Solutions.

"The general expectation is for jet fuel demand to strengthen over the coming quarters as vaccine rates improve and more of the region's economies open select tourist hotspots to fully vaccinated travellers, although this is contingent on the region's ability to handle, manage the virus outbreak without any further significant slips down the road."

Asian jet fuel cracks were at $7.74 per barrel over Dubai crude during Asian trading hours, compared with $7.82 per barrel at the end of last week.

SHELL SETS SIGHTS ON SUSTAINABLE AVIATION FUEL TAKE-OFF

- Royal Dutch Shell plans to start producing low-carbon jet fuel at scale by 2025, in an attempt to encourage the world's airlines to reduce greenhouse gas emissions.

- Aviation, accounting for 3% of the world's carbon emissions, is considered one of the toughest sectors to tackle due to a lack of alternative technologies to jet fueled-engines.

- Shell said it aims to produce 2 million tonnes of sustainable aviation fuel (SAF) by 2025, a ten-fold increase from today's total global output. Produced from waste cooking oil, plants and animal fats, SAF could cut up to 80% of aviation emissions, Shell said.

SINGAPORE CASH DEALS 

- No jet fuel deals, no 10 ppm gasoil trades

OTHER NEWS

- Oil dropped more than $1 a barrel to below $75 on Monday as rising risk aversion weighed on stock markets and boosted the U.S. dollar, while more U.S. Gulf oil output came back online in the wake of two hurricanes. 

- China's exports of clean marine bunker, or very low-sulphur fuel oil (VLSFO), dipped 2% in August from a year-ago period, customs data showed on Monday. 

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


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