Singapore -- Asia's cash differentials for 10 ppm gasoil rose to their strongest level in nearly five months on Wednesday, while the front-month spread for the industrial fuel narrowed to its slimmest contango since July-end. Cash discounts for gasoil with 10 ppm sulphur content narrowed by 2 cents to 3 cents a barrel to Singapore quotes, a level not seen since Aug. 7, the last time when the differentials were in the positive territory. The Jan/Feb time spread for 10 ppm gasoil in Singapore traded at a discount of 3 cents per barrel on Wednesday, compared with minus 8 cents per barrel a day earlier. In a contango market, prompt prices are lower than those for future delivery, but a narrowing contango indicates the market may flip back into backwardation - the opposite of contango that is usually seen as a sign that prices are likely to head higher in future months. But a mutant variant of the coronavirus, which has hit Britain and fueled concerns about global oil demand recovery, was dampening sentiments in the market ahead of the year-end holidays, market watchers said. Refining margins, also known as cracks, for 10 ppm gasoil climbed 28 cents to $6.34 a barrel over Dubai crude during Asian trading hours. INVENTORIES - Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 9.5% to 5.5 million barrels in the week ended Dec. 21, data via S&P Global Platts showed. - U.S. distillate stockpiles rose by 1 million barrels in the week to Dec. 18, compared with expectations for a decrease of 904,000 barrels, data from industry group the American Petroleum Institute (API) showed on Tuesday. INDIA FUEL EXPORTS - India's diesel exports fell 5.5% to 2.24 million tonnes in November from 2.37 million tonnes in October, government data showed on Tuesday. The November exports were about 31.5% lower year on year, the data showed. - The country exported about 270,000 tonnes of jet fuel in November, compared with 180,000 tonnes in October and 710,000 tonnes in November 2019, data showed.