Asian gasoil profit margins surge to 8-mth high as supplies tighten

* Refinery run cuts help tighten supply
* Lower exports from South Korea, India, Japan support
* Cash premiums at strongest levels since November

By Koustav Samanta
SINGAPORE, July 23 (Reuters) - Asian refining margins for
gasoil have climbed to their highest in eight months as some
regional refinery issues and run cuts have tightened supplies,
while firmer domestic demand in South Korea has led to a drop in
exports from the country.
Strong margins for middle distillates have underpinned
overall profits for Asian refiners. Gasoil margins are also
expected to find support from demand to meet new rules requiring
lower sulphur for ship fuel that will likely consist of
low-sulphur gasoil.
Refining margins, also known as a crack spread, for gasoil
with 10 parts per million (ppm) sulphur content GO10SGCKMc1
rose to $17.06 a barrel over Dubai crude on Monday, their
highest since Nov. 19.
Cracks for the benchmark gasoil grade, which have soared
over 21% since end-May, are currently at their strongest
seasonal levels in the past six years, Refinitiv data showed.
"Singapore inventories are lower, Vietnam's Nghi Son oil
refinery is operating at reduced rates, while Philippine oil
refiner Petron's come-back has got delayed," a Seoul-based
trader said.
"Petron refinery started turnaround in early May and was
supposed to come back to normal by June, but is not back yet.
Also, exports from Korea might be lower in August due to tax
issues. Even if small individually, the impact could be
substantial when all these are united," he added.
A Petron Corp trader based in Singapore refused to discuss
the refinery turnaround when contacted by Reuters because the
matter is confidential.
The Nghi Son oil refinery was restarted earlier this month
after the plant's fluid catalytic cracking unit went down,
disrupting operations at the 200,000-barrel-per-day refinery.
South Korean consumers are ramping up gasoil purchases
before an ongoing tax cut on transportation fuel in the country
expires in August, two gasoil traders and a broker said.
South Korea had initially cut domestic transport fuel taxes
by 15% for six months in November, later extending the cuts for
four months but lowering it to 7%. Gasoil exports from South Korea in June were at 1.9 million
tonnes, about 8% lower from May, Refinitiv data showed. June
gasoil exports from Japan and India were also down about 54% and
4%, respectively, from the previous month.
Meanwhile, Singapore middle distillate stocks eased to a
two-week low of 10.7 million barrels in the week to July 17,
Enterprise Singapore data showed on Thursday. The gasoil margins, however, might briefly lose steam over
the next few weeks as India and China are expected to export
more supplies, at least two Singapore-based middle distillates
traders said on Tuesday.
Diesel demand typically takes a hit during monsoon months in
India as heavy rainfall and floods curtail demand for the
transportation fuel, while China's crude throughput has climbed
to a record in June, following start-up of two new, large
refineries. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Singapore ultra low-sulphur gasoil refining margin https://tmsnrt.rs/2O9FZcx
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