Asia Distillates-Gasoil cracks jump to 2-week high, cash premiums rise

Top palm oil producers Indonesia and Malaysia remain committed to their mandatory biodiesel programmes, despite higher prices of the feedstock, to meet green energy goals, senior officials said on Thursday. They use palm oil as blending for biodiesel.

SINGAPORE: Asian refining margins for 10 ppm gasoil rose to a two-week high on Thursday, while cash premiums for the industrial fuel grade climbed as the April/May time spread widened its backwardated structure.

Refining margins, or cracks, for 10 ppm gasoil rose to $34.49 a barrel over Dubai crude during Asian trading hours, the strongest since March 10. The cracks were at $32.11 per barrel a day earlier.

Cash premiums for the benchmark gasoil grade with 10 ppm sulphur content were at $6.02 a barrel to Singapore quotes, compared with $5.98 per barrel on Wednesday.

The front-month spread for 10 ppm gasoil traded at $10.80 per barrel on Thursday, the widest in two weeks. The time spread was at $10.30 a barrel on Wednesday.

INVENTORIES

- Singapore's middle distillate inventories inched up 0.5% to 7.6 million barrels in the week to March 23, according to Enterprise Singapore data. This week's stocks, however, were 45% lower than a year earlier. [O/SING1]

- Weekly Singapore middle distillate inventories have averaged about 7.8 million barrels so far this year, compared with an average of 11.8 million barrels in 2021, Reuters calculations showed.

- U.S. distillate inventories, which include diesel and heating oil, fell by 2.1 million barrels in the week to March 18, versus expectations for a 1.4 million-barrel drop, the Energy Information Administration said on Wednesday. [EIA/S]

BIODIESEL MANDATES

- Top palm oil producers Indonesia and Malaysia remain committed to their mandatory biodiesel programmes, despite higher prices of the feedstock, to meet green energy goals, senior officials said on Thursday.

- Indonesia and Malaysia use palm oil as blending for biodiesel. Indonesia since early 2020 has been using mandatory B30, a biodiesel containing 30% of palm-based fuel, the highest mandatory mix in the world, to slash imports of diesel fuel.

OTHER NEWS

- Indian private refiner Nayara Energy, part-owned by Russia's Rosneft , has purchased Russian oil after a gap of a year, buying about 1.8 million barrels of Urals from trader Trafigura, two trade sources said and Refinitiv data showed. Read full story- Reuters