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Energy

Asia Distillates-Jet cracks ease from multi-week high as aviation demand struggles

    SINGAPORE, Oct 7 (Reuters) - Asian refining margins for jet fuel dipped on Wednesday after
hitting a more than two-month high in the previous session as aviation demand continued to
struggle amid surging COVID-19 cases in several countries.
    Refining profit margins or cracks for jet fuel in Singapore slipped 3 cents to
$2.05 per barrel over Dubai crude during Asian trading hours. The cracks hit their strongest
since July 28 on Tuesday, thanks to tightening supplies.
    The jet fuel cracks, which have gained about 58% since the end of last week, however, are at
their weakest seasonal levels on record, Refinitiv Eikon data showed.
    Industry analysts said the profit margins were likely to remain a fraction of long-term
averages for now as a substantial recovery in aviation demand was not expected until the second
half of next year due to reimposed coronavirus restrictions in many markets.
    "Strict mitigation measures are being eased in certain markets...  although those over the
aviation sector will probably be the last ones to go, with imported cases posing real threats to
undo individual government efforts to contain local outbreaks," said Peter Lee, a senior oil &
gas analyst at Fitch Solutions.  
    "Essential travels and select category of business travels are being permitted in more
markets, but the same for leisure flights is perhaps not on the cards, until a vaccine is made
available."
    Cash discounts for jet fuel JET-SIN-DIF widened to 52 cents a barrel to Singapore quotes
on Wednesday, compared with a 50-cent discount per barrel a day earlier.
    
    INVENTORIES
    - Middle-distillate inventories in the Fujairah Oil Industry Zone slipped 10.9% to 3.9
million barrels in the week ended Oct. 5, data via S&P Global Platts showed.
    - The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared
with the weekly average of 2.4 million barrels in 2019, Reuters calculations showed.
    - Meanwhile, U.S. distillate fuel inventories fell by 1 million barrels in the week to Oct.
2, compared with expectations for a draw of 995,000 barrels, data from industry group the
American Petroleum Institute (API) showed on Tuesday.
    
    SINGAPORE CASH DEALS
    - No jet fuel trades, no gasoil deals
    
    OTHER NEWS
    - Oil prices fell on Wednesday after U.S. President Donald Trump dashed hopes for a fourth
stimulus package to boost the coronavirus-hit economy and on a larger-than-expected increase in
U.S. crude inventories.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               44.10     1.35       3.16       42.75  GO-SIN
 GO 0.5 Diff                     -1.75     0.21     -10.71       -1.96  GO-SIN-DIF
 Spot Gas Oil 0.25%              44.50     1.35       3.13       43.15  GO25-SIN
 GO 0.25 Diff                    -1.34     0.22     -14.10       -1.56  GO25-SIN-DIF
 Spot Gas Oil 0.05%              44.71     1.14       2.62       43.57  GO005-SIN
 GO 0.05 Diff                    -1.13     0.01      -0.88       -1.14  GO005-SIN-DIF
 Spot Gas Oil 0.001%             45.30     1.14       2.58       44.16  GO10-SIN
 GO 0.001 Diff                   -0.54     0.02      -3.57       -0.56  GO10-SIN-DIF
 Spot Jet/Kero                   42.81     0.46       1.09       42.35  JET-SIN
 Jet/Kero Diff                   -0.52    -0.02       4.00       -0.50  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;)
  
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