RTRS:Asia Distillates-Gasoil flips to contango 1st time in 5 months
SINGAPORE, Feb 22 (Reuters) - Asian gasoil flipped
into contango for the first time in five months, while demand
remained low from developing countries amid higher underlying
crude prices.
The March/April swaps timespread fell 11 cents to minus two
cents a barrel, the lowest since Sep. 2, 2011, Reuters data
showed.
Countries like Vietnam and Indonesia have been trying to
avoid diesel purchases in the spot market due to higher global
oil prices which are affecting demand.
Brent crude prices rose to a nine-month high near
$122 a barrel this week as investors worried about the impact of
Western sanctions on Iran's crude supplies and after a financial
bailout for Greece.
This has also pushed diesel prices to a nine-month high,
dampening margins for middle distillates.
"I'm so used to seeing a backwardated market for gasoil, so
it's strange. I'm sure some players are getting excited at
gasoil being in contango," said a Singapore-based middle
distillates trader, referring to a possibility of storage play
should the contango continue to widen.
Floating storage has largely not been viable for the past
few months due to the strength in gasoil, with front-month
timespreads having reached nearly $2 a barrel.
The gasoil market could pick up towards the end of the
second quarter as demand for gasoil increases for the
agriculture season, traders said.
Jet fuel prices, meanwhile, continued to widen its premium
over gasoil with physical regrade flipping to a positive value
on Wednesday, on demand from Japan.
Japan's kerosene stocks fell to a 10-month low last week as
unusually cold weather increased demand for heating oil.
Kerosene stocks fell by 0.98 million barrels to 11.2
million barrels, which was an 11 percent decline from the same
year-ago period.
A month ago, kerosene inventories were about 25 percent
above their year-earlier level, but the stockpiles have fallen
since then due to the colder weather.
For exchange of futures for swaps (EFS) curve, click
* TENDERS: No new tenders issued.
* SWAPS OUTRIGHTS: Gasoil's March and April swaps jumped
$1.12 and $1.23 to $134.69 and $134.71 a barrel, respectively.
- Jet fuel swaps for March were up $1.41 to $135.13, while
March regrade, or the difference between jet and diesel prices,
gained 29 cents to a premium of 44 cents a barrel.
* CRACKS: Gasoil's crack for March fell 47 cents to $16.00 a
barrel over Dubai crude, while jet fuel's crack slipped by 18
cents to $16.44 a barrel.
* EAST-WEST SPREADS: The Exchange of Futures for
Swaps (EFS) for February fell 16 cents to minus $14.06 a tonne.
* CASH DIFFERENTIALS: Cash premiums for the 0.5 percent,
0.25 percent and 500 ppm sulphur gasoil grades gained 5-12 cents
to premiums of 14 cents, $1.00 and $1.50 respectively while jet
fuel differential remained unchanged at a premium of five cents
a barrel to Singapore quotes.
* PHYSICAL OUTRIGHTS: Benchmark diesel with a maximum
sulphur content of 0.5 percent gained $1 to $134.83 a barrel,
while jet fuel climbed $1.41 to $135.18 a barrel.
* CASH DEALS: One jet deal, one gasoil deal.
- Hin Leong bought 100,000 barrels of jet fuel from Sietco
for loading over Mar. 8-12 at parity to Singapore quotes.
- ConocoPhillips bought 150,000 barrels of 10 ppm sulphur
diesel for loading over Mar. 8-12 from Total at a premium of
$2.25 a barrel to Singapore quotes.
