Asia's gasoil crack recovered 7.2 percent to $11.70 a barrel on Tuesday, supported by stronger crude prices. But gasoil supplies of benchmark grade 500ppm persisted at high levels, traders said. Talk of possible run cuts could also have given the crack a boost, but there could be a limit on how much refiners can reduce if they opt for that choice, traders said.
"There's an oversupply of 500ppm gasoil. Overall, the middle distillates margins are comparatively weak and run cuts could take place. But I doubt refiners can cut that much given that they may have commitments to fulfil," said a trader. United Arab Emirates' Emarat has bought two 55,000-tonne cargoes of jet fuel for September 12-13 and September 22-23 delivery to Jebel Ali at a premium of about $3 a barrel to Middle East quotes on a cost-and-freight (C&F) basis.
Traders said Emarat may have bought the cargoes from Aramco Trading. The premium was unchanged from the amount Emarat paid to Shell previously for an August cargo. Sri Lanka's IOC was seeking 23,000 tonnes of 0.25 percent sulphur gasoil and 15,000 tonnes of gasoline for September 11-12 delivery to Colombo and Trincolmalee through a tender closing on August 12.
Qatar's Tasweeq has offered a total of 80,000 tonnes of jet fuel for September 20-25 loading while Malaysia's Petronas has offered 225,000 barrels of jet fuel for August 27-28 loading from Kertih. Taiwan's CPC has offered 300,000 barrels of 0.25 percent sulphur gasoil for September 1-30 loading from Kaohsiung through a tender due to be awarded on August 14. Kuwait Petroleum Corp (KPC) has offered 60,000 tonnes of 500ppm gasoil for September 19-20 loading through a tender closing on August 12. The Middle East refiner has however sold 60,000 tonnes of 0.2 percent sulphur gasoil for September 1-2 loading to an undisclosed buyer, with the premium heard at 50 cents a barrel to Middle East quotes on a free-on-board (FOB) basis.
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