Asian gasoline margins rise with more driving activity

Asian gasoline margins have hit a more than a three-month high in line with increased driving activity in Asia-Pacific.

The margins, reflecting the Argus 92R gasoline price assessment against Ice Brent crude, have been in negative territory for most of March-May. They were assessed at an average of a $2.67/bl discount during March-May against an unprecedented fall in gasoline demand as countries across Asia-Pacific imposed restrictions to limit the spread of Covid-19.

But increased driving activity in Asia as more governments have since eased movement restrictions have supported gasoline margins. They rose yesterday to a $2.97/bl premium, the highest level since 12 March when margins were at a $5.39/bl premium.

Average driving activity during first-half June across 16 Asian regions was at an average of 75.31pc below the 13 January baseline compared with 57.44pc and 45.37pc below the baseline in May and April respectively, according to mobility data from US technology firm Apple that gives an indication of driving activity by tracking direction requests.

The 16 Asian countries and territories surveyed were Australia, Cambodia, Hong Kong, India, Indonesia, Japan, Macau, Malaysia, New Zealand, the Philippines, South Korea, Saudi Arabia, Singapore, Taiwan, Thailand and Vietnam.

All 16 Asian regions recorded an increase in driving activity in first-half June compared with May. Malaysia, Taiwan and Vietnam showed even higher driving activity than the 13 January baseline, while Australia, Japan, New Zealand and Thailand were within a 20pc range of returning to baseline levels.

Driving activity in Asia reflects regional gasoline demand. Margins averaged at a $7.04/bl premium during February when driving activity was around 96.54pc of the baseline and fell to a $7.02/bl discount in April when driving activity fell to just 45.37 of the baseline. Margins then crept up into positive territory to an average of a $1.14/bl premium as driving activity rose to an average of 75.31pc of the baseline during first-half June.

But hints of a second wave of Covid-19 infections in some parts of northeast Asia could cap future gasoline demand, with China's capital Beijing seeing a new surge in coronavirus cases that threaten the country's economic recovery.

By Aldric Chew