SINGAPORE (Oct 7): Asia's gasoline margins have bucked the trend of seasonal weakness and more than tripled from year-ago levels as a string of refinery outages in the United States and in Asia have led to fuel supplies drying up.

A slowdown in transportation demand after the Northern hemisphere summer typically knocks the gasoline 'crack' to its lowest levels for the year in early October, but lately crack values are approaching their mid-summer peak as unexpected U.S. refinery stoppages have boosted Asian margins.

The unusual strength in Asian gasoline margins is not expected to last, though, once the U.S. refineries resume normal operations in about a month or two, giving a small window for gasoline traders to cash in.

Average gasoline margins - the premiums obtained from refining a barrel of Brent crude into the motor fuel - hit nearly $11.85 a barrel for the first four trading sessions of October. This was almost 6.5 times the level from the same period last year. <GL92-SIN-CRK>

September's average crack value, an industry term used to describe margins, was almost at $10 a barrel, reflecting a 250 percent spike versus the same period last year.

"The strength in the gasoline market is all U.S. driven," said a Singapore-based trader.

Supply disruptions in the United States have led to gasoline buyers in Latin America looking elsewhere for cargoes, traders said. Europe, the Mediterranean and Asia are usually net gasoline exporters. A supply crunch in the West could cause traders to draw on Asian gasoline.

And the recent shutdown of Indonesia's 348,000 barrels-per-day (bpd) Cilacap refinery and the 260,000 bpd Balikpapan plants for maintenance has compounded the global shortage.

Indonesia is Asia's top gasoline importer, and the refinery outages have buoyed import demand even further in recent weeks. The country is projected to import around 10.5 million barrels of 88-octane gasoline in October versus about 9.5 to 10 million barrels for September.

Reduced run rates at Taiwan's Formosa Petrochemical Corp's 540,000 bpd Mailiao refinery and a shutdown at Sinopec Corp's 250,000 bpd Gaoqiao refinery also contributed to the supply crunch, said Ngai Si Min, consultant at FGE.

"Indonesian demand is very good, so is Western demand, with most of the gasoline-making units being down in the U.S. Gulf," said a Singapore-based trader.

RIDING THE SHORT-TERM WAVE

The gasoline crack will ease once U.S. refiners restore output as demand in Asia alone is unable to sustain the bull-run, traders and industry sources said.

"It defies the seasonal pattern, but the cracks will ease when the refineries come back online," Ngai said of the current strength in the gasoline market.

As historical data has shown, any unusual run-ups in the crack value during the off-peak season have swiftly met with a sharp fall.

For now, the strength will likely last through most of October given the thin supplies in the United States, where inventories in the last week of September fell by 1.8 million barrels to 208.5 million barrels, the lowest level since November 2012, according to weekly figures from the Energy Information Administration.

The decline was expected because of heavy fluid catalytic cracker outages across the United States, said Energy Aspects in an Oct. 1 note. "This is supportive for RBOB prices, a trend we see continuing into October," it added. RBOB refers to U.S. gasoline futures.