Diesel margin breaches $26/bbl as tight outlook prevails

Asia's diesel margin breached $26 per barrel on Tuesday, buoyed by expectations of persisting tight supply and robust demand.

The crack for benchmark 10ppm sulphur gasoil (GO10SGCKMc1) closed at a premium near $26.50 a barrel, maintaining at its highest since February 2024, data compiled by LSEG showed.

Markets have been tracking higher after the U.S. sanctioned key Russian oil exporters last week. Meanwhile, regional supplies in Asia also remained capped, with India exporting less month-on-month, ship-tracking data showed.

Singapore cash differentials for gasoil have also soared amid stronger bids and backwardation at prompt months.

Meanwhile, jet fuel has also been supported, with prompt intermonth timespread widening above $2 per metric ton on Tuesday.

Regrade (JETREG10SGMc1) widened to a discount of 70 cents per barrel, as gasoil continued strengthening at a firmer extent compared to jet.

Asia's overall refining margin has also surged to a 20-month high this week, amid the strong performance in the middle distillates markets.

SINGAPORE CASH DEALS

- No gasoil deal, no jet fuel deal

REFINERY NEWS

- Operations at Citgo's Corpus Christi east refinery in Texas continue to be curtailed following an operational issue last week, with restoration efforts currently underway, the company said.

OTHER NEWS

- Oil prices fell 2% on Tuesday, marking their third day of declines as investors assessed the effect of U.S. sanctions on Russia's two biggest oil companies along with a potential OPEC+ plan to raise output.

- Sanctions on oil-exporting countries could push up crude prices but the effect will be limited because of surplus capacity, the International Energy Agency Executive Director Fatih Birol said on Tuesday.

- Russia's second-largest oil producer, Lukoil, said it would sell its international assets following sanctions over Ukraine announced last week by the United States.

- Indian refiners have not placed new orders for Russian oil purchases since sanctions were imposed, as they await clarity from the government and suppliers, sources told Reuters on Tuesday.

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