Asia middle distillates rose on Monday but gas oil's intermonth spread expanded to its highest in a month on strong demand from Europe and tight supplies from Asia. Reflecting the firmer market, the product's crack spread also strengthened while cash differentials remained firm at slight discount levels on a cash deal.
European trader Mercuria bought 150,000 barrels of the benchmark 0.5 percent sulphur grade, for loading on December 15-19, from Hin Leong at a discount of 20 cents a barrel, steady to Friday's levels.
Gas oil's December/January swaps spread widened 15 cents to 80 cents a barrel, the highest since October 9 while its December crack versus Dubai strengthened to $19.96, up from $19.27. The tight European market is reflected by lower inventories in Amsterdam-Rotterdam-Antwerp region at 1.497 million tonnes in the week ended November 15, down 17 percent from year-ago.
In Asia, South Korean refiners cut diesel shipments by a quarter to 380,000 tonnes for December due to stockpiling of the heating fuel for winter. Reflecting bullish sentiment, Taiwan's Formosa Petrochemical Corp sold a 0.005 percent sulphur cargo, for loading in January to December 2008, at premiums of $2.40-$2.50 a barrel to Singapore spot quotes, up from plus $0.90-$1.00 this year.
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