SINGAPORE: Asian refining margins for 10 ppm gasoil soared to their highest level in more than five weeks on Monday, while the front-month spread for the industrial fuel grade widened its backwardated structure.

Refining margins, also known as cracks, for 10 ppm gasoil rose to $43.35 a barrel over Dubai crude during Asian trading hours, up from $41.43 a barrel on Thursday, and within close sight of a record high of $44.04 a barrel touched last month.

The gasoil market will tend to have more upward risks in the near term due to the current low inventory levels across the globe, trade sources said.

“We’re not going to see more changes to inventories (any time soon) due to the steep backwardation environment,” a Singapore-based gasoil trader said, adding that the ongoing Russia-Ukraine crisis was “still very much affecting the western supply and demand outlook.”

The May/June time spread for the benchmark gasoil grade traded at $10.78 per barrel, as against $9.50 a barrel on Thursday, Refinitiv Eikon data showed.

Cash differentials for gasoil with 10 ppm sulphur content were at a premium of $7.71 a barrel to Singapore quotes, down 20 cents from Thursday.

China refined 2% less oil in March than a year earlier, with throughput falling to its lowest level since October as a surge in crude oil prices squeezed margins and tight COVID-19 lockdowns hurt fuel consumption.

Refining volume last month was 58.59 million tonnes, equivalent to 13.8 million barrels per day (bpd), data from the National Bureau of Statistics (NBS) showed on Monday.