SINGAPORE- Asian refining margins for 10 ppm gasoil slipped on Monday despite weaker raw material crude prices, as ongoing mobility restrictions in several markets continued to weigh on sentiment.
Refining margins, also known as cracks, for 10 ppm gasoil were at $8.53 per barrel over Dubai crude during Asian trading hours, 21 cents lower from Friday.
The regional gasoil market is expected to grapple with strong supplies in the near term as the overall pace of demand recovery remains sluggish, and the monsoon season typically hurts consumption in key markets such as India and Vietnam, trade sources said.
India's gasoil exports rebounded to 2.58 million tonnes in May, about 39% higher compared with April volumes, Refinitiv Oil Research assessments showed.
The monsoon season in India typically runs from June to September, when heavy rainfall and floods in different parts of the country tend to dent demand for the transportation fuel.
Cash discounts for gasoil with 10 ppm sulphur content remained unchanged at 7 cents per barrel to Singapore quotes on Monday.
The June/July time spread for the benchmark gasoil grade in Singapore narrowed its backwardation to trade at 5 cents per barrel.
CHINA'S CRUDE IMPORTS DROP
- China's crude oil imports fell 14.6% in May from a high base a year earlier, with daily arrivals hitting the lowest level this year, as maintenance at refineries limited consumption of the resource.
- But refinery utilisation rates are expected to rebound in coming months as refineries resume operations, analysts said.
- May arrivals were 40.97 million tonnes, data released by the General Administration of Customs showed, equivalent to 9.65 million barrels per day (bpd). That compares to 9.82 million bpd in April and 11.3 million bpd in May last year when Chinese buyers snapped up cheap oil amid the spread of the coronavirus.
OTHER NEWS
- Oil eased after hitting a two-year high above $72 a barrel on Monday, pressured by the prospect of higher Iranian exports though recovering demand and OPEC+ supply curbs provided underlying support.
- Global commodities trader Trafigura and Norway's Yara said they had signed a memorandum of understanding (MoU) aiming to supply the marine industry with carbon emissions-free ammonia for fuel.
Reporting by Koustav Samanta; Editing by Subhranshu Sahu) ((koustav.samanta@thomsonreuters.com)(+65 6870 3503)(Reuters Messaging: koustav.samanta.thomsonreuters.com@reuters.net))
