Asia Distillates-Gasoil cash discounts narrow as supplies tighten

    SINGAPORE, Jan 28 (Reuters) - Asia's cash differentials for 10 ppm gasoil climbed on
Thursday, helped by firmer demand for physical cargoes, while middle distillate stocks in
Singapore slumped to their lowest level in more than six months.
    Cash discounts for gasoil with 10 ppm sulphur content GO10-SIN-DIF narrowed 24 cents a
barrel to Singapore quotes, compared with a discount of 28 cents per barrel a day earlier.
    The front-month time spread for the benchmark gasoil grade in Singapore
traded at a discount of 11 cents per barrel on Thursday. The spread has narrowed its contango by
80% over the last three months, trimming the earlier incentive for traders to store the product.
    "New COVID-19 restrictions announced in Europe and Asia over Q4 20 and early-Q1 21 are
weighing heavily on personal mobility at present, but they are likely to be eased in the spring
as vaccination rollouts increase," consultancy Energy Aspects said in a monthly note.
    "Diesel demand will only improve further once curfews and other restrictions are relaxed in
the spring. Until then, the market must be careful when pricing in a recovery, as it risks
bringing back supply prematurely." 
    Refining margins, or cracks, for 10 ppm gasoil rose to $6.18 a barrel over
Dubai crude during Asian trading hours on Thursday, up from $5.57 per barrel in the previous
    - Singapore's middle distillate inventories dropped 7.2% to 14.1 million barrels in the week
to Jan. 27, according to Enterprise Singapore data.
    - Weekly Singapore middle distillate inventories have averaged 14.6 million barrels so far
this year, compared with an average of 13.9 million barrels in 2020, Reuters calculations
showed. This week's stocks were 25.5% higher than a year ago.
    - U.S. distillate stockpiles fell by 815,000 barrels in the week to Jan. 22, the Energy
Information Administration said on Wednesday, compared with analysts' expectations in a Reuters
poll for a 361,000-barrel drop.
    - No gasoil deals, no jet fuel trades
    - Three consortia including Asian shipyards are preparing to compete to build Brazil's
Petrobras' first two in-house platforms in more than seven years, according to four
people familiar with the tender who declined to be named as the information is private.

    Samsung Heavy Industries Co, Hyundai Heavy Industries Holding Co Ltd
and Daewoo Heavy Industries & Machinery Ltd have formed separate consortia that are expected to
bid after seven months of preparations, the sources said. Offers are due on Monday, Feb. 1. 

 CASH ($/T)                     ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                        59.02    -0.37      -0.62       59.39  GO-SIN
 GO 0.5 Diff                              -1.68     0.02      -1.18        -1.7  GO-SIN-DIF
 Spot Gas Oil 0.25%                       59.12    -0.37      -0.62       59.49  GO25-SIN
 GO 0.25 Diff                             -1.58     0.02      -1.25        -1.6  GO25-SIN-DIF
 Spot Gas Oil 0.05%                       59.39    -0.37      -0.62       59.76  GO005-SIN
 GO 0.05 Diff                             -1.31     0.02      -1.50       -1.33  GO005-SIN-DIF
 Spot Gas Oil 0.001%                      60.47    -0.34      -0.56       60.81  GO10-SIN
 GO 0.001 Diff                            -0.24     0.04     -14.29       -0.28  GO10-SIN-DIF
 Spot Jet/Kero                            58.06    -0.34      -0.58        58.4  JET-SIN
 Jet/Kero Diff                            -0.23     0.04     -14.81       -0.27  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 Ramakrishnan M.)