Asia distillates-cracks up on Sri Lanka demand

Friday, 16 December 2011 01:54 - - {{hitsCtrl.values.hits}}

SINGAPORE (Reuters):Asian gasoil cracks remained above $18 a barrel as additional spot demand for the high sulphur gasoil emerged from Sri Lanka.

Gasoil's crack for January was up 7 cents to $18.40 a barrel over Dubai crude.

Sri Lankan imports of the product are expected to double in January from previous months as domestic demand for power generation rises.

Some support for the high sulphur diesel was seen from Sri Lanka, with January imports of the product expected to double from previous months as domestic demand for power generation rises.

Ceylon Petroleum Co (Ceypetco) is seeking about 600,000 barrels in total of 0.25 percent sulphur gasoil for delivery in January, through three different spot tenders, industry sources said.

But a few traders felt the Asian gasoil crack was set to come under pressure if the winter in Europe continues to be mild, as Asian cargoes will be trapped in the region.

Reliance and Gunvor were heard to be still holding on to unsold spot cargoes, though this could not be confirmed.

Liquidity during the Asian physical trading window also remained thin with just 150,000 barrels of high sulphur gasoil changing hands

Formosa Petrochemical Corp. is offering 480,000 barrels of 500 ppm sulphur gasoil for loading over Jan. 24-28, first spot cargo offered by the company since July.

In term negotiations, Thai Oil has finalised its gasoil term tender for next year after skipping term sales this year.

It has sold about 300,000 barrels a month of 500 ppm sulphur gasoil for loading from January to December next year at a premium of just above $1 a barrel above Singapore quotes. Saudi Aramco's term negotiations for gasoil and jet are still ongoing with bids and offers still wide apart, industry sources said. Bahrain Petroleum Co was heard to have sold its second 500 ppm sulphur gasoil cargo loading in late December at a premium of $3.20 a barrel to Middle East quotes, about 20 cents firmer than a previous deal, sources said.