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Asia Distillates-Gasoil cracks register fourth straight weekly drop

Asian refining margins for 10 ppm gasoil slipped on Friday, posting their fourth consecutive weekly decline, while cash discounts for the industrial fuel widened amid muted demand in the physical market.

Refining margins, or cracks, for 10 ppm gasoil dipped 4 cents to $5.91 per barrel over Dubai crude during Asian trading hours. Cracks for the benchmark gasoil grade in Singapore have slipped 2.2% this week, Refinitiv Eikon data showed.

The cracks remain at their weakest seasonal levels on record, weighed down by a sluggish demand recovery, and steady export volumes emerging from China and India that is keeping the region grappling with ample supplies.

Gasoil exports from India this month are expected to exceed February’s total of 1.85 million tonnes, while March-loading diesel exports from China are expected to be in a range of 2.2 million-2.3 million tonnes, Refinitiv Oil Research assessments showed.

But traders remain hopeful the gasoil market would strengthen in coming months as COVID-19 vaccinations help governments lift mobility restrictions and industrial activities pick up more steam, while upcoming spring turnarounds at regional refineries would tighten supplies.

Cash differentials for 10 ppm gasoil GO10-SIN-DIF were at a discount of 24 cents per barrel to Singapore quotes on Friday, compared with a discount of 19 cents per barrel on Thursday.

ARA INVENTORIES
– Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub STK-GO-ARA dropped 2.4% to 2.36 million tonnes in the week to March 18, data from Dutch consultancy Insights Global showed.
– The data showed ARA jet fuel inventories STK-JET-ARA rose 2.3% to 986,000 tonnes.

SINGAPORE CASH DEALS
– One jet fuel trade, no gasoil deals

OTHER NEWS
– Goldman Sachs said it sees the oil price pullback as a buying opportunity and forecasts Brent crude could reach $80 per barrel this summer even as the recent rally in prices “takes a big breather.”

– Oil prices rose by more than $1 on Friday, after a big sell-off in the previous session as a new wave of coronavirus infections across Europe triggered fresh lockdowns and dampened expectations of any imminent recovery in fuel demand.

For a list of derivatives prices, including margins, please double click the RICs below.

ASSESSMENTS
 MID-DISTILLATES                                                                         
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               65.84    -3.31      -4.79       69.15  GO-SIN
 GO 0.5 Diff                     -1.64    -0.04       2.50        -1.6  GO-SIN-DIF
 Spot Gas Oil 0.25%              66.01    -3.31      -4.77       69.32  GO25-SIN
 GO 0.25 Diff                    -1.47    -0.04       2.80       -1.43  GO25-SIN-DIF
 Spot Gas Oil 0.05%              66.34    -3.31      -4.75       69.65  GO005-SIN
 GO 0.05 Diff                    -1.14    -0.04       3.64        -1.1  GO005-SIN-DIF
 Spot Gas Oil 0.001%             67.24    -3.32      -4.71       70.56  GO10-SIN
 GO 0.001 Diff                   -0.24    -0.05      26.32       -0.19  GO10-SIN-DIF
 Spot Jet/Kero                   64.38     -3.2      -4.74       67.58  JET-SIN
 Jet/Kero Diff                   -0.42        0       0.00       -0.42  JET-SIN-DIF
 Brent M1                                                                                
 Gasoil M1                                                                               
 Gasoil M1/M2                                                                            
 Gasoil M2                                                                               
 Regrade M1                                                                              
 Regrade M2                                                                              
 Jet M1                                                                                  
 Jet M1/M2                                                                               
 Jet M2                                                                                  
 Gasoil 500ppm-Dubai                                                                     
 Cracks M1                                                              
 Gasoil 500ppm-Dubai                                                                     
 Cracks M2                                                              
 Jet Cracks M1                                                                           
 Jet Cracks M2                                                                           
 East-West M1                                                                            
 East-West M2                                                                            
 LGO M1                                                                                  
 LGO M1/M2                                                                               
 LGO M2                                                                                  
 Crack LGO-Brent M1                                                                      
 Crack LGO-Brent M2

Source: Reuters (Reporting by Koustav Samanta; Editing by Ramakrishnan M.)

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