The FOB Singapore December/January 92 RON gasoline timespread fell to a 28-month low of minus 68 cents/b Wednesday, as the gasoline spot market continued to be plagued by a supply overhang and lackluster demand, S&P Global Platts data showed.
Reflecting this bearishness, the FOB Singapore 92 RON gasoline crack against front-month ICE Brent crude futures -- which measures the relative value of the product to crude oil -- slipped back into negative territory Wednesday at minus 95 cents/b at the Asian close, Platts data showed. The last time the crack was in negative territory was on Monday at minus 2 cents/b.
"The market outlook now is very bearish, especially with the announcement of a new batch of Chinese oil product export quotas ... the market has already reacted, with spreads and cracks coming down further," a Singapore-based market source said.
Views on the near-term outlook for the Asian gasoline market are mostly bearish, with market participants expecting further weakness to persist on heavy supply and a falling crude complex. "I think that the gasoline oversupply is here to stay and though there are talks that refineries may cut run rates, I don't think it will be enough to make up for the current supply glut," another source added.
At the Asian close Wednesday, the FOB Singapore December/January 92 RON gasoline swaps spread slid 15 cents/b day on day to be assessed at minus 68 cents/b.
This marked a 47 cents/b decline in the prompt intermonth spread since the beginning of the November, when it was assessed at minus 21 cents/b, Platts data showed.
The last time the prompt gasoline timespread was assessed lower was on July 26, 2016, when it was assessed at minus 70 cents/b, Platts data showed.
The December/January gasoline swap itself has plunged $15.92/b since the beginning of November, Platts data showed.
The prompt December gasoline swap fell to a 16-month low to be assessed at $60.17/b at the Asian close Wednesday.
This marked a 17 cents/b fall day on day, and the last time the prompt gasoline swap was assessed lower was on July 15, 2017, at $58.51/b.
On the physical outright price, the FOB Singapore 92 RON gasoline price, which had been trending downwards since mid-October, tumbled below the $60/b mark to be assessed at $59.92/b Wednesday. The market was last lower more than one year ago on July 25, 2017, at $58.99/b.
Meanwhile, more sell tenders were offered into the market. China's CNOOC offered up to 38,000 mt of 92 RON gasoline for loading over December 25-26 from Huizhou Dagang terminal. Thai PTT also offered 15,000 mt of 101 RON gasoline reformate for loading over December 28-30 from Map Ta Phut.
