Refining margins for gasoil, used for transport and
industrial purposes, were at $18.75 a barrel, after falling for
the fourth consecutive trading session, according to the data.
Weakening cracks have been largely attributed to an ongoing
supply glut within Asia and overall tepid regional demand.
Moreover, a closed arbitrage spread for Asian gasoil to
be exported to northwest Europe, despite a widening spread
between prompt ICE gasoil swaps and Asian prices at around minus
$55 per barrel on Monday , further weighed on
fundamentals.
More May-loading supplies are expected to emerge from northeast Asian refiners once a handful of them return from the holidays, a Singapore-based market source said.
Looking ahead, analysts expect the weakness in oil
product cracks to be further exacerbated in the near term, given
the strength in crude futures.
"The (oil production) cuts and resulting crude price
action are bound to compress the forward margins and run rates,"
Jorge Leon, senior vice-president of Rystad Energy, said in a
client note.
(Reporting by Trixie Yap; Editing by Sonia Cheema)
