Gasoline was one of fuels the hardest hit by the lockdowns as restrictions on mobility cut demand for the motor fuel by more than 50% in several regions.
“Even a slight uptick in gasoline demand will provide support to overall margins,” a source at a trading firm said.
In Asia, gasoline profit margins GL92-SIN-CRK turned positive on Tuesday for the first time in nearly two months as demand started to pick up.
European margins remain negative, but traders said they expect a recovery as more refineries shut down units to deal with a glut of diesel.
“In terms of demand recovery, gasoline demand will improve first, followed by diesel and jet fuel,” said Lee Dal-seok, senior research fellow at the Korea Energy Economics Institute.
In Britain, fuel demand rose in the past couple of weeks, the Petroleum Retailers Association said after the government eased some restrictions. The Association also said the recovery in gasoline was outpacing diesel as motorists hit the road while avoiding public transport.
The recovery in gasoline contrasts with a weaker outlook for diesel where slow demand and oversupply are still hurting refining margins.
“The upside on distillates after an exit from lockdown is much smaller than for gasoline,” a distillates trader said. Although he said demand for distillates from agriculture and manufacturing had remained buoyant during the lockdown.
U.S. margins to refine crude into distillates HOc1-CLc1 have fallen to $10.45 a barrel, the lowest since at least 2009.
Meanwhile, U.S. gasoline stocks have fallen for three consecutive weeks to 252.9 million barrels, according to data from the Energy Information Administration. Analysts expect U.S. gasoline stocks to fall for a fourth week.
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*Laura Sanicola & Stephanie Kelly, Ron Bousso & Jane Chung, Editing: Jane Merriman – HP