Asia spot cash differentials firm for refined products as outages take toll

London (Quantum Commodity Intelligence) – Cash differentials across major refined oil products have picked up in Asia over the past two days, with bid and trades indicating a stronger demand picture for gasoline, diesel and jet kero for nearby loading of molecules, Quantum data shows.

On Tuesday, trades for 10ppm diesel were pegged at flat to the underlying swaps curve, compared to a -$0.20/b discount last week in a relatively flat market structure.

The diesel market had been structurally weak for the past fortnight, with traders seeking discounts to later-dated loadings to lift oil in the Singapore trading hub.

The move on Tuesday follows a similar picture to that of gasoline, where cash differentials rebounded into positive territory on Monday, as outages at one of India's biggest export-led refineries has dovetailed with concerns about refinery outages in India and the UAE.

And in jet, bids were heard firmer on Monday for spot material and narrowing the cash differential, in a dynamic that saw the prompt-front month contango in cracks narrow from -$1.14/b on Friday to -$0.92/b on Tuesday.

Some analysts point to a broader recovery, particularly from India which is slowly returning to normal after a brutal second wave of COVID-19.

The forward structure of diesel and jet cracks has changed little since Friday, while gasoline demand further down the curve has fallen $0.30-0.50/b.