Spot Asian gasoline cracks hit one-month high on US stock draw

London, (Quantum Commodity Intelligence) – Gasoline refining margins in Asia hit their highest level in a month on Thursday as stock figures in both Asia and the US showed draws and the east-west spread widened amid firmer demand and lower production in the US.

RON 92 cracks reached $6.69/b by 1630 Singapore time, the highest level since 24 May largely on firmer swaps that showed cracks were improving.

On Wednesday the US Energy Information Administration reported a near 3 million-barrel draw in stocks on what appeared to be a fall off in refining, a rise in export and a fall in imports.

Gasoline deliveries, were slightly up.

That was enough to haul up RBOB prices, with the front month paper crack rising almost $1/b compared to a day earlier at $22.30/b and widening the east-west spread for July by $1.20/mt to $24.20/mt, according to broker data that was timestamped at 1630 Singapore time.

That made the arbitrage from Europe to the US more profitable and in turn hauled up Asian prices.

Asian dynamics, however, are also playing a part with google mobility data showing that Indian movement last week picked up markedly versus the month before.

While gasoline cracks have been in a bull-trend so far this month, the Q4 cracks have been in a bull trend for several months, largely on the crude market structure of a steepening backwardation.

Another bullish factor for gasoline, however, was a stock draw in Singapore, with light ends falling 5% on the week to 13.482 million barrels, a figure that is also 5% down on the average so far this year.