May 12, 2020 / 10:42 AM / 2 months ago

Asia Distillates-Jet fuel cash discounts narrow, cracks drop

    SINGAPORE, May 12 (Reuters) - Asia's cash discounts for jet fuel narrowed on Tuesday amid a
slight uptick in buying interest in the physical market, but refining margins for the aviation
fuel lingered in a negative territory as majority of flights remained grounded due to the
coronavirus restrictions.
    Cash discounts for jet fuel JET-SIN-DIF were at $2.12 a barrel to Singapore quotes, the
smallest discounts since March 24. They were at a discount of $2.28 a barrel on Monday.
    Refining margins or crack spreads for jet fuel slipped to a discount of $2.26 a
barrel to Dubai crude during Asian trading hours on Tuesday, compared with minus $1.13 a barrel
on Monday.
    The jet fuel market is expected to remain subdued through the current quarter due to
extended lockdowns and border restrictions to curb the virus epidemic, but it might get some
support starting the third quarter as containment measures ease, trade sources said.
    Europe's largest low-cost carrier Ryanair on Tuesday confirmed it will return to 40% of its
planned flight schedule from July 1. This comes after Abu Dhabi's Etihad Airways said it will
offer flights from Melbourne to London from May 15.
    The regional aviation market, however, would likely take years to recover to 2019 levels as
the coronavirus crisis is expected to hurt passenger demand for a prolonged period of time,
according to market watchers. 
    The International Air Transport Association said in April it expects a 50% decline in
passenger demand for Asia-Pacific airlines in 2020, compared with last year.
    The May/June time spread for jet fuel in Singapore narrowed its contango
structure to trade at a discount of $2.30 per barrel on Tuesday, compared with minus $2.75 a
barrel on Monday.
    Meanwhile, refining margins for gasoil with 10 ppm sulphur content were at
$4.13 a barrel over Dubai crude on Tuesday, down from $4.37 per barrel a day earlier.
    Cash discounts for 10 ppm gasoil GO10-SIN-DIF were at a discount of $1.35 per barrel to
Singapore quotes on Tuesday, compared with $1.22 per barrel on Monday.
    
    SINGAPORE OIL TRADER ZENROCK OWES MORE THAN $600 MLN
    - Singapore-based ZenRock Commodities Trading Pte Ltd, hit by tumbling oil prices and the
coronavirus pandemic, owes more than $600 million to creditors, the company said in a court
filing seen by Reuters on Monday.
    - In the application for "moratorium relief", a form of bankruptcy protection, filed last
Wednesday, the company said it owed at least six banks a total of $166.1 million and had
outstanding balances of about $449 million in total with at least 10 unsecured creditors.
    
    SINGAPORE CASH DEALS
    - No jet fuel trades, no gasoil deals
    - For more information, click
    
    OTHER NEWS
    - Singaporean shipping firm Ocean Tankers (Pte) Ltd, a unit of troubled oil trader Hin Leong
Trading Pte Ltd, has applied to be placed under the management of a court-appointed supervisor,
two sources with knowledge of the matter told Reuters.
    - Oil futures rose on Tuesday, boosted by an unexpected commitment from Saudi Arabia to
deepen production cuts in June in a bid to help drain the glut in the global market that has
built up as the coronavirus pandemic crushed fuel demand.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                              
 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close    RIC
 Spot Gas Oil 0.5%                 29.67    -0.73      -2.40         30.40  GO-SIN
 GO 0.5 Diff                       -4.51    -0.09       2.04         -4.42  GO-SIN-DIF
 Spot Gas Oil 0.25%                30.16    -0.73      -2.36         30.89  GO25-SIN
 GO 0.25 Diff                      -4.02    -0.09       2.29         -3.93  GO25-SIN-DIF
 Spot Gas Oil 0.05%                30.37    -0.63      -2.03         31.00  GO005-SIN
 GO 0.05 Diff                      -3.81     0.01      -0.26         -3.82  GO005-SIN-DIF
 Spot Gas Oil 0.001%               32.83    -0.77      -2.29         33.60  GO10-SIN
 GO 0.001 Diff                     -1.35    -0.13      10.66         -1.22  GO10-SIN-DIF
 Spot Jet/Kero                     25.12    -1.05      -4.01         26.17  JET-SIN
 Jet/Kero Diff                     -2.12     0.16      -7.02         -2.28  JET-SIN-DIF
                                                                                              
 For a list of derivatives prices, including margins, please double click                     
 the RICs below.                                                            
 Brent M1                                                                                     
 Gasoil M1                                                                                    
 Gasoil M1/M2                                                                                 
 Gasoil M2                                                                                    
 Regrade M1                                                                                   
 Regrade M2                                                                                   
 Jet M1                                                                                       
 Jet M1/M2                                                                                    
 Jet M2                                                                                       
 Gasoil 500ppm-Dubai                                                                          
 Cracks M1                                                                  
 Gasoil 500ppm-Dubai                                                                          
 Cracks M2                                                                  
 Jet Cracks M1                                                                                
 Jet Cracks M2                                                                                
 East-West M1                                                                                 
 East-West M2                                                                                 
 LGO M1                                                                                       
 LGO M1/M2                                                                                    
 LGO M2                                                                                       
 Crack LGO-Brent M1                                                                           
 Crack LGO-Brent M2                                                                           
 
 (Reporting by Koustav Samanta; Editing by Rashmi Aich)
  
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