SINGAPORE: Asia’s 10-ppm sulphur gasoil margins weakened on expectations of rising supply in the next few months after the release of the first batch of export quotas from China for 2023.

State-owned refiners previously planned for very little exports this month, but some are now looking for prompt loadings for second-half January following the announcement of new quotas, said analyst Mia Geng at FGE.

This is against a backdrop of rising commercial stockpiles for diesel in China since two weeks. Refining margins for 10-ppm sulphur gasoil fell by more than $3.50 a barrel to $32.70 a barrel.

Cash differentials for 10-ppm sulphur gasoil also fell to $1.71 a barrel, but losses were cushioned by prompt buying interest in the spot market.

Jet fuel refining margins likewise went down to $31.32 a barrel.

Taiwan’s FPCC offers Feb 500-ppm sulphur gasoil

China has released 17.06 million tonnes of oil products export quotas to state-run firms under the first batch of 2023 quotas, versus the 13 million tonnes allotted a year earlier, according to two Chinese commodities consultancies on Tuesday.

Oil prices held in a narrow range in Tuesday Asian trade, though the outlook for demand was clouded by a weak manufacturing activity survey from China, and a warning from the head of the International Monetary Fund that the global economy faced a tough year ahead.

Vietnam’s largest refinery, Nghi Son Refinery and Petrochemical (NSRP), has shut a residual fluid catalytic cracking (RFCC) unit for “troubleshooting”, two sources familiar with the matter said.