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Asian Gasoline Margins to Stay Weak on Oversupply: Sparta

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Asian gasoline cracks are likely to stay weak as the region’s refiners much adjust to oversupply, according to Sparta Commodities’ analyst Jorge Molinero.

  • This is despite more bullish sentiment for gasoline coming from the US market, which is unlikely to significantly boost Asia’s margins, he said.
  • Arbitrage opportunities from the Middle East and Singapore to the West are closed due to higher freight costs, putting additional downside pressure on diesel and gasoline prices.
  • Bloomberg noted that gasoline cracks in Singapore are down to their lowest levels since November, falling below $4.5/b.
  • Asia is also seeing a further lengthening in supply as refineries return from maintenance and Chinese domestic demand remains weak.
  • Meanwhile, Middle Eastern gasoline continues to flow to the region due to high run-rates at its refineries.
  • This could force some Asian refiners to respond by cutting runs post-maintenance to clear some of the market length, Sparta said.
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Asian gasoline cracks are likely to stay weak as the region’s refiners much adjust to oversupply, according to Sparta Commodities’ analyst Jorge Molinero.

  • This is despite more bullish sentiment for gasoline coming from the US market, which is unlikely to significantly boost Asia’s margins, he said.
  • Arbitrage opportunities from the Middle East and Singapore to the West are closed due to higher freight costs, putting additional downside pressure on diesel and gasoline prices.
  • Bloomberg noted that gasoline cracks in Singapore are down to their lowest levels since November, falling below $4.5/b.
  • Asia is also seeing a further lengthening in supply as refineries return from maintenance and Chinese domestic demand remains weak.
  • Meanwhile, Middle Eastern gasoline continues to flow to the region due to high run-rates at its refineries.
  • This could force some Asian refiners to respond by cutting runs post-maintenance to clear some of the market length, Sparta said.