Higher US supplies weigh on Asian gasoline margin
The Asian gasoline margin, or the premium of the Argus Singapore 92R gasoline price to Ice Brent crude, fell below $3/bl for the first time since late December.
An unexpected surge in gasoline stocks in the US has depressed the prompt-month RBOB Nymex futures margin and in turn pressured Singapore gasoline prices, said traders. The Asian gasoline margin was last lower at $2.50/bl on 29 December.
EIA data yesterday show gasoline stocks rising by 4.259mn bl from a week earlier to 256.412mn bl for the week ending 5 February, despite forecasts of a 1.814mn bl build.
The prompt-month RBOB Nymex margin responded by falling sharply from $12.37/bl on 8 February to $10.76/bl yesterday, according to Argus data. RBOB Nymex values are typically used as a proxy to the Singapore 92R grade's strength, said traders.
Unrest in Myanmar (Burma), high inventories in Vietnam and muted lunar new year travel activity because of the Covid-19 outbreak have also placed a cap on regional demand, said traders. Trading firms are "recycling" cargoes by reselling cargoes they have previously at much lower prices, depressing the market, said market participants.
Higher Singapore light distillate inventories have also contributed to the weaker prices. But fundamentals are still providing some support with the market anticipating reduced supplies from a heavy turnaround season, affecting key gasoline suppliers in northeast Asia during March-April.
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