MOSCOW (MRC) -- Asia's cash premiums for 10 ppm gasoil rose for a fourth consecutive session on Friday, soaring to their highest level in over a year, buoyed by active buying interests in the physical market and strong arbitrage demand from Europe, reported Reuters.
Cash differentials for gasoil with 10 ppm sulphur content surged to a premium of 31 cents per barrel to Singapore quotes, a level not seen since late-July 2020.
Asia's gasoil market has found a cushion, despite lacklustre regional demand on the back of rampaging Delta variant outbreaks, as Europe enters peak demand season and sucks up cargoes for restocking heating oil ahead of winter months. Traders and industry analysts expect a stronger pull for Asian barrels from Europe in the next few weeks due to lack of US supplies after Hurricane Ida struck the Gulf coast last weekend and shuttered or curtailed output at six refineries in Louisiana.
Refining profit margins, also known as cracks, for 10 ppm gasoil jumped 30 cents to USD9.81 per barrel over Dubai crude during Asian trading hours, their strongest since end-March last year. Cracks for the benchmark gasoil grade in Singapore have climbed 9% this week, in a second straight weekly rise, Refinitiv Eikon data showed.
Gaoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub slipped 0.2% to 2.06 million tonnes in the week ended Sept. 2, according to Dutch consultancy Insights Global. - ARA jet fuel inventories rose 4.6% this week to 1.03 million tonnes. LNG - Liquefied natural gas (LNG) buyers with long-term contracts are asking their suppliers for extra volumes of the super-chilled fuel pegged to oil prices which are currently much lower than spot prices, several trade and industry sources told Reuters. - Some have requested to load bigger cargoes bought under their long-term contracts instead of turning to the spot market to buy additional cargoes, or have asked for earlier delivery of the cargoes, the sources said.
As MRC wrote previously, oil prices rose as a rebound in global demand was widely expected and a slow recovery for the US Gulf Coast export and refining hub from the hurricane late last week looked set to deplete stocks further.
About 1.7 million barrels per day of oil production remains shut in the US Gulf of Mexico, with damage to heliports and fuel depots slowing the return of crews to offshore platforms.
Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
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