Asia’s 10 ppm sulphur gasoil margins surged by more than 13% on Tuesday, helped by weather-related supply concerns in the US market, stronger oil futures and firmer demand expectations after China eased COVID curbs.
Gains were curbed by uncertainty in China’s export volumes, pending the release of export quotas for 2023.
Refining margins for 10 ppm sulphur gasoil rose to $37.98 a barrel.
Cash differentials for 10 ppm sulphur gasoil rose to $1.60 a barrel, with prompt buying interest emerging amid a lack of competitively-priced offers.
Jet fuel refining margins rose by around 14% from the previous close to $36.68 a barrel. Regrade widened slightly to $1.65 a barrel.
China will stop requiring inbound travellers to go into quarantine starting from Jan. 8, the National Health Commission said on Monday in a major step towards easing curbs on its borders, which have been largely shut since 2020.
Frigid cold and blowing winds on Friday knocked out power and cut energy production across the United States, driving up heating and electricity prices as people prepared for holiday celebrations. Some 1.5 million barrels of daily refining capacity along the US Gulf Coast was shut due to the bitterly cold temperatures.
The production losses are not expected to last, but they have lifted fuel prices.
Oil hit a three-week high on Tuesday as China’s latest easing of COVID-19 restrictions spurred hopes of a fuel demand recovery, with further support coming from cuts to US energy production caused by winter storms.