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Asia Distillates-Gasoil cracks drop to over 6-week low, cash discount widens

    SINGAPORE, Jan 7 (Reuters) - Asian refining margins for 10 ppm gasoil slid to their weakest
in more than six weeks on Thursday as traders worried about a hit to demand recovery due to
renewed lockdowns in several markets.
    Refining margins, or cracks, for 10 ppm gasoil plunged to $4.74 a barrel over
Dubai crude during Asian trading hours, a level not seen since Nov. 23 and down from $5.19 per
barrel a day earlier.
    Cracks for the benchmark gasoil grade have fallen 22% so far this week.
    The gasoil market is coming under renewed pressure as some refineries are ready to increase
run rates, even while demand growth is not materlialising and lockdowns are being introduced
again, a middle distillates trader said.
    Cash differentials for gasoil with 10 ppm sulphur content GO10-SIN-DIF were at a discount
of 38 cents a barrel to Singapore quotes, the widest discounts since Nov. 10. They were at a
discount of 35 cents per barrel on Wednesday.
    The prompt-month time spread for 10 ppm gasoil in Singapore, which has stayed
in a contango for the last two weeks, traded at a discount of 16 cents per barrel on Thursday,
Refinitiv Eikon data showed.
    
    INVENTORIES
    - Singapore's middle distillate inventories dropped 4.5% to a more than four-month low of
14.5 million barrels in the week to Jan. 6, according to Enterprise Singapore data.
    - Weekly Singapore middle distillate inventories averaged about 13.9 million barrels in
2020, Reuters calculations showed. This week's stocks were 50.5% higher than a year ago.
    - U.S. distillate stockpiles rose by 6.4 million barrels in the week to Jan. 1, versus
expectations for a 2.3 million-barrel rise, the U.S. Energy Information Administration data
showed on Wednesday.
    
    SINGAPORE CASH DEALS
    - Two gasoil deals, no jet fuel trades

    OTHER NEWS
    - Oil prices hit their highest since late February on Thursday after a fall in U.S.
stockpiles added further support following the unilateral decision by Saudi Arabia to cut
output.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               57.12     0.45       0.79       56.67  GO-SIN
 GO 0.5 Diff                     -1.57     0.02      -1.26       -1.59  GO-SIN-DIF
 Spot Gas Oil 0.25%              57.22     0.45       0.79       56.77  GO25-SIN
 GO 0.25 Diff                    -1.47     0.02      -1.34       -1.49  GO25-SIN-DIF
 Spot Gas Oil 0.05%              57.32     0.45       0.79       56.87  GO005-SIN
 GO 0.05 Diff                    -1.37     0.02      -1.44       -1.39  GO005-SIN-DIF
 Spot Gas Oil 0.001%             58.31      0.4       0.69       57.91  GO10-SIN
 GO 0.001 Diff                   -0.38    -0.03       8.57       -0.35  GO10-SIN-DIF
 Spot Jet/Kero                   56.87     0.41       0.73       56.46  JET-SIN
 Jet/Kero Diff                   -0.16    -0.03      23.08       -0.13  JET-SIN-DIF
                                                                                        
 For a list of derivatives prices, including margins,                                   
 please double click the RICs below.                                    
 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                                                                     
 
 (Reporting by Koustav Samanta; Editing by Kirsten Donovan)
  
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