(Repeats story published on Thursday with no changes to text)
* Gasoil prices set to outperform gasoline towards year end
* Oil products likely to stay tight on lower China exports,
* Power shortages to drive switch to diesel for power
SINGAPORE, Oct 14 (Reuters) - Asian oil refiners' margins
have rallied back to their highest since before the COVID-19
pandemic struck, spurred by a doubling of gasoil profits as the
global economic recovery and power shortage drive demand for the
fuel, analysts and traders said.
Gasoil demand has surged as power generators seek
alternatives to record-high natural gas and coal and as
industrial consumption has climbed while economies reopen from
COVID-19 restrictions. That has pushed the gasoil profit margin
nearly 60% higher in the past month, replacing gasoline as the
key component of overall refinery profits.
The Singapore complex refining margin, a proxy for Asian
refiners' profitability, jumped to more than $7 a barrel earlier
this month, the highest since September 2019. <DUB-SIN-REF>
The rebound will incentivise Asian refiners to boost output
in the coming months although regional supplies of refined oil
products are expected to stay capped by declining Chinese
exports and low inventories.
"We see improving momentum for Asian refiners ahead,
benefiting not just from the near-term gas-to-oil switching this
winter but also on peaking of Chinese oil products exports,"
Citi analyst Oscar Yee said in a note, raising the bank's
outlook for South Korea's SK Innovation, Thailand's
Star Petroleum Refining Pcl and IRPC PCL,
and Taiwan's Formosa Petrochemical Corp.
The release of pent-up demand could see regional gasoline
consumption rising by some 100,000 barrels per day (bpd) over
November and December, while gasoil demand is expected to rise
by some 200,000 bpd between now and December, underpinned by the
resumption of more economic activities, said Dylan Sim, an
analyst at consultancy FGE.
"Low exports from China will continue to support Asias
gasoil complex through to the end of 2021," he said.
Also, middle distillate inventories across key storage hubs
in Asia are at their lowest for this time of the year since 2013
and are now 9.1 million barrels lower than the 2017-2019
average, Sim said, after refiners cut output because of the
recent lower profits.
Global power shortages caused by natural gas and coal price
spikes will also drive consumers to switch to diesel for power.
Consultancy Rystad Energy expects the switch in fuels to boost
Asia's oil demand by 400,000 bpd on average over the next six
Refining profit margins for benchmark gasoil with 10 parts
per million of sulphur in Singapore are at their highest since
December 2019, while the margin for 92-octane gasoline has
climbed about 50% in October, Refinitiv data showed.
"We see (gasoil) cracks increasing towards the end of the
year, with demand expected to strengthen further over the
agricultural season," said Wood Mackenzie analyst Daphne Ho,
adding that stronger demand for jet fuel and kerosene in the
fourth quarter would prevent these fuels from being blended into
the gasoil pool.
Also, Asian refiners would need at least a month or two to
raise output as some plants are still shut for maintenance in
October, a Singapore-based gasoil trader said.
"We can have slightly better (gasoil) supply from November,
but still (that would be used) to cope with the potential
increase in demand regionally, the trader said.
(Reporting by Mohi Narayan in New Delhi and Koustav Samanta in
Singapore; Editing by Florence Tan and Christian Schmollinger)