February 27, 2020 / 11:04 AM / in a month

Asia Distillates-Jet fuel cash differentials slide, cracks continue to crumble

    SINGAPORE, Feb 27 (Reuters) - Asia's cash differentials for jet fuel flipped into discounts
on Thursday, while refining profit margins for the aviation fuel plunged further to a fresh low
in more than a decade even as raw material crude prices fell.
    The regional jet fuel market has been taking a beating in recent weeks from crumbling
aviation demand as global airlines cancelled scores of flights and passengers cancelled travel
plans due to a virus epidemic.
    Cash differentials for jet fuel JET-SIN-DIF flipped back into a discount of 7 cents per
barrel to Singapore quotes on Thursday, compared with a premium of 17 cents per barrel on
    Refining margins or cracks for jet fuel dropped for a third consecutive session
to $6.04 per barrel over Dubai crude during Asian trading hours, a fresh low since mid-2009.
They were at $7.16 per barrel in the previous session.
    The aviation fuel profits have slumped about 59% this year, according to Refinitiv Eikon
    Airlines are flying blind into a crisis of unknown severity and duration, while the outlook
is worsening as new outbreaks spread fear beyond the already suspended Asian destinations -
threatening more routes and broader air travel demand.
    Crude oil prices fell for a fifth day on Thursday to their lowest since January 2019 as a
growing number of new coronavirus cases outside of China fuelled fears of a pandemic, which
could slow the global economy and lower crude demand.
    Refining margins for gasoil with 10 ppm sulphur content fell to $7.79 per
barrel over Dubai crude on Thursday, down from $9.32 per barrel in the previous session. 
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF were at 20 cents per barrel to Singapore
quotes, compared with a premium of 23 cents per barrel on Wednesday.
    The front-month time spread for 10 ppm gasoil moved into contango on Thursday
to trade at a discount of 6 cents a barrel. They traded at a premium of 9 cents per barrel on
    Contango market structure, where prompt prices are lower than those for future delivery,
tends to encourage holders of physical barrels to store the product and sell it later to secure
higher prices.
    - China's Unipec, an arm of Asia's top refiner Sinopec, snapped up the lion's
share of gasoil cargoes traded in Singapore this month, despite weaker domestic demand amid a
coronavirus epidemic, according to trade data and industry sources.
    - The purchases were made even though China has ramped up fuel exports in recent weeks to
compensate for losses to domestic demand as it grapples with the virus outbreak, having not been
able to prevent a surplus even after refining output cutbacks. 
    - Unipec has bought the majority of these cargoes from PetroChina and Trafigura
    - Singapore onshore middle distillate stocks drew 2.4% to a three-week low of 11.4 million
barrels in the week to Feb. 26, Enterprise Singapore data showed.
    - Weekly middle distillate inventories have averaged 10.9 million barrels so far in 2020,
compared with 11.1 million barrels in 2019, Reuters calculations showed.
    - Overall, onshore middle distillate inventories were 6.8% lower year-on-year.
    - U.S. crude stocks rose while gasoline and distillate inventories fell last week, the
Energy Information Administration said on Wednesday.
    - Distillate stockpiles, which include diesel and heating oil, fell by 2.1 million barrels
in the week to 138.5 million barrels, versus expectations for a 1.7 million-barrel drop, the EIA
data showed.
    - India's Mangalore Refinery and Petrochemicals Ltd (MRPL) has offered 65,000 tonnes of high
speed diesel (HSD) - gasoil with 10 ppm sulphur content - for March 17-19 loading from the port
of New Mangalore.
    - The tender closes on Feb. 28 and has a same-day validity.
    - For more such information, please click
    - One gasoil trade, three jet fuel deals
    - For more information, click
    - Hontop Energy (Singapore) Pte Ltd, the trading arm of a Shandong-based refiner, has gone
into receivership, according to its business profile on the website of Singapore's accounting
and corporate regulator.
    - Tanker charter rates have plunged more than 80% as the coronavirus outbreak slams the
brakes on major economies, costing the sector hundreds of millions of dollars in lost business,
a senior shipping industry official said.
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                56.57    -3.46      -5.76       60.03  GO-SIN
 GO 0.5 Diff                      -2.01    -0.05       2.55       -1.96  GO-SIN-DIF
 Spot Gas Oil 0.25%               56.84    -3.45      -5.72       60.29  GO25-SIN
 GO 0.25 Diff                     -1.74    -0.05       2.96       -1.69  GO25-SIN-DIF
 Spot Gas Oil 0.05%               57.53    -3.46      -5.67       60.99  GO005-SIN
 GO 0.05 Diff                     -1.05    -0.05       5.00       -1.00  GO005-SIN-DIF
 Spot Gas Oil 0.001%              58.78    -3.44      -5.53       62.22  GO10-SIN
 GO 0.001 Diff                     0.20    -0.03     -13.04        0.23  GO10-SIN-DIF
 Spot Jet/Kero                    56.81    -3.23      -5.38       60.04  JET-SIN
 Jet/Kero Diff                    -0.07    -0.24    -141.18        0.17  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 Shinjini Ganguli)
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