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Asia distillatesGasoil cracks gain, cash premiums crawl up

December 02/2019

MOSCOW (MRC) -- Asian refining margins for 10-ppm gasoil climbed on Wednesday, while cash premiums for the industrial and transportation fuel inched higher amid a slight uptick in buying interests in the physical market, Reuters.

Refining margins, also known as cracks, for 10-ppm gasoil rose to USD14.80/bbl over Dubai crude during Asian trade, up from USD14.66/bbl on Tuesday.

Cracks for the benchmark gasoil grade in Singapore, which have dropped about 11% in the last four weeks, were currently about 1% lower than their seasonal average for this time of the year in the last three years, Refinitiv Eikon data showed.

The gasoil market would likely bottom out sometime soon as some refinery run cuts are underway, which would help tighten supplies to an extent, a trader said on Wednesday.

Cash premiums for gasoil with 10 ppm sulfur content were at USD0.18/bbl to Singapore quotes on Wednesday, USD0.02/bbl higher from a day earlier.

The front-month time spread for 10-ppm gasoil widened by USD0.05 to trade at a premium of USD0.20/bbl on Wednesday, Refinitiv data showed. Meanwhile, cash differentials for jet fuel were at a discount of USD0.61/bbl to Singapore quotes on Wednesday, compared with a discount of USD0.62/bbl on Tuesday.

Jet fuel cracks eased to USD14.15/bbl over Dubai crude on Wednesday, compared with USD14.21/bbl in the previous session. Fujairah stocks. Middle-distillate inventories in the Fujairah Oil Industry Zone fell 14.1% from a week earlier to 3 MMbbl in the week to Nov. 25, data via S&P Global Platts showed.

Stocks of middle distillates in the Fujairah oil hub have averaged 2.2 MMbbl so far in 2019, Reuters calculations showed. This compares with a weekly average of 2.8 MMbbl in 2018. Compared with year-ago levels, weekly Fujairah middle distillate stocks were 34.5% higher.

API inventory data. U.S. crude stocks rose last week while gasoline inventories increased and distillate stocks fell, data from industry group the American Petroleum Institute showed on Tuesday. Crude inventories rose by 3.6 MMbbl in the week to Nov. 22 to 449.6 MMbbl, compared with analysts' expectations for a decrease of 418,000 bbl.

Distillate fuels stockpiles, which include diesel and heating oil, fell by 665,000 bbl, compared with expectations for a 750,000-bbl gain, the API data showed.

As MRC informed earlier, oversupply condition in the Asian butadiene market is likely to be offset by a possible export cut from the US after a fire hit the TPC Group's Port Neches butadiene and raffinate petrochemical plant east of Houston, Texas.

Located adjacent to the Sabine Neches River, a part of the Sabine Neches Waterway, TPC's Port Neches plant can produce more than 900 million lb (426,000 mt) of butadiene and raffinate a year, according to the company's website. A source familiar with company's operations said the site has two butadiene lines with capacities of 166,000 mt/year and 260,000 mt/year.

Butadiene is one of the feedstocks for the production of acrylonitrile-butadiene-styrene (ABS).

According to ICIS-MRC Price report, in Asia, the falling prices of feedstocks for ABS production have been pushing prices of material down in the Russian market. LG Chem's import prices for November quantities were as follows for Russian buyers: natural ABS - at USD1,400-1,420/tonne FOB Korea, black ABS - at USD1,610-1,630/tonne FOB Korea, white ABS - at USD1,640-1,660/tonne FOB Korea. December prices may drop by another USD30-50/tonn.
Natural grades of Korean ABS went down to Rb138,000-143,000/tonne CPT Moscow, including VAT, in the domestic market in mid-November, whereas black ABS was offered at Rb156,000-160,000/tonne and white ABS - at Rb158,000-163,000/tonne CPT Moscow , including VAT.
Author:Anna Larionova
Tags:Asia, petroleum products, crude oil, petrochemistry.
Category:General News
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