Asia 10 ppm gasoil cracks fall below $20 a barrel to over one-year low

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.

SINGAPORE (Reuters) - Asia 10 ppm gasoil and jet fuel refining margins fell to below $20 a barrel, hitting a fresh low for the first time since mid-March 2022, after crude oil futures surged, Refinitiv data showed on Monday. 

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)