Asia's gasoil crack for benchmark 500ppm grade slipped to $10.23 a barrel, bringing the year's average to less than $14, the lowest in five years, on a stubborn supply glut caused by increased refining capacity and slower demand. The average jet fuel crack for 2015 also ended at less than $14 a barrel, the lowest since 2010. "Performance in 2016 for gasoil and jet fuel is likely going to stay bad," said a Singapore-based trader.
Traders said demand would have to be exceptionally strong to absorb the global high stockpiles but the warm winter this year has added to the sellers' woes. In Japan, sales of kerosene fell 14.7 percent to a 46-year low in November from a year ago as average temperatures at eight major cities were above last year's level.
Reuters Eikon weather data showed cold temperatures forecast for continental Europe will be short-lived. Lower outright prices were not enough to lift jet fuel demand in Asia. Bahrain has offered up to 60,000 tonnes of 10ppm gasoil for January 19-22 loading through a tender due to be awarded on January 6.
In Singapore, trader Hin Leong returns after a day's absent to pick up more gasoil cargoes from the cash market. It bought a total of 450,000 barrels of 500ppm from Total and Unipec at flat. This brought its total purchases of the gasoil grade since the start of the month to around 4.5 million barrels, or close to 70 percent of all trades transacted for 500ppm in December.
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