The Singapore cracking margin against Dubai crude rebounded Monday after eight consecutive sessions of decline to $3.46/b at the Asian close, underpinned by a sudden uptick in light distillate cracks, Platts data showed.
The margin had been in free-fall since September 30, when it stood at $6.89/b, amid a stronger outlook for Dubai in October.
The refining spread had earlier peaked at a 31-month high of $7.11/b on September 25 due to softer crude.
Refinery margins in Asia have been boosted by a plunge in benchmark Dubai crude prices in September amid concerns at the time of a growing supply glut.
Part of the recent decline in margins stems from a relatively stronger regional crude market this month as Asian refiners begin buying December- loading barrels for plants coming back online after seasonal maintenance.
Stronger demand for Middle East crude this month than for November has lifted value for prompt December-loading Middle East barrels, narrowing the contango in the Dubai crude market structure.
Platts Monday assessed the first-month/third-month spread for Dubai crude in a contango of $1.75/b, down from an average contango of $2.24/b last month.
Spot differentials for December-loading spot cargoes have already surged this month.
Abu Dhabi's light sour Murban and Das Blend were heard to have changed hands at premiums of 40-50 cents/b above their respective official selling prices, up from premiums of up to 20 cents/b seen last month for November-loading barrels.
Much of this months' initial demand has been driven by Japanese refiners coming back from maintenance and moving early in the trading cycle to secure distillate-rich light sour barrels to meet winter demand.
Market fundamentals going forward will hinge on the size of the November loading program for Iraq's Basrah crude.
A bigger-than-expected October Basrah-loading program last month helped push the Dubai crude market deep into contango, but expectations of a relatively smaller program for November is underpinning sentiment currently.
The gasoline crack -- the spread between front-month 92 RON gasoline swaps and front-month Dubai crude swaps -- widened 47 cents/b from the previous close to $10.01/b Monday.
The spread has averaged $10.84/b since the start of October, down from $11.81/b over the same period last month.
WINTER LULL LOOMING
Gasoline in Asia continues to find support in increased spot demand across the region, especially India and Vietnam, although pressure is mounting due to the looming seasonal lull in winter.
The front-month naphtha/Dubai crack swap rose 12 cents/b from last Friday to 51 cents/b Monday. The spread has averaged 40 cents/b since the start of October, up from the minus $2/b over the same period last month.
The Asian naphtha market continued to gain ground this week, supported by firm year-end demand for naphtha, while re-supply November via the East to West arbitrage was seen as below demand.
Market participants estimated Asia would receive around 1.8 million mt of arbitrage volumes in November, while demand for naphtha in the region was said to be around 1.8 million-1.9 million mt.
All yields and netbacks are produced using Platts product assessments and Turner & Mason's TMMS refinery modeling platform, configured to represent actual processing capabilities in specific regional centers, based on a survey of operating refineries to be updated annually.
