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Energy

Asia Distillates-Jet fuel cash discounts narrow, cracks turn positive

    SINGAPORE, Sept 14 (Reuters) - Asia's cash differentials for jet fuel edged higher on
Monday, but market participants said they expect the aviation fuel market to struggle in the
near term as flights remain grounded due to COVID-19 restrictions.
    Cash discounts for jet fuel JET-SIN-DIF were at $1.10 a barrel to Singapore quotes on
Monday, compared with a discount of $1.22 a barrel on Friday.
    Refining margins for jet fuel flipped into a positive territory for the first
time in more than three weeks, at 12 cents over Dubai crude during Asian trading hours on
Tuesday. They were at a discount of 93 cents per barrel to Dubai crude at the end of last week.
    
    JET FUEL AN EXCEPTION
    - Global oil demand in transportation sectors, with the exception of jet fuel, could return
to pre-pandemic levels by the fourth quarter of 2021, draining excess supplies from the market,
Vitol's Chief Executive Officer Russell Hardy said.
    - "Jet fuel of course is one of the products that is hit the most and has become quite the
bottleneck for refineries globally," Molly Morris, a senior vice president at Equinor said at
the virtual Asia Pacific Petroleum Conference (APPEC) on Monday.
    - Colombian oil company Ecopetrol's Chief Executive Felipe Bayon said he expects the
country's gasoline and diesel demand to return to pre-pandemic levels "probably by the end of
this year, early next year", but jet fuel will take much longer.
    
    PLANE RECYCLERS BET ON PARTS BOOM
    - As COVID-19 grounds swaths of airline fleets, companies that profit off the dismantling
and trade of aircraft parts are seeing early signs of an expected rebound in activity as
carriers accelerate plane retirements.
    - While companies that store, dismantle, and buy and sell used aircraft parts see
opportunity in parked planes, a sudden increase in the supply of used parts risks depressing
prices in the estimated $3 billion a year industry, despite demand from airlines seeking to
lower maintenance costs, executives and analysts say.

    SINGAPORE CASH DEALS
    - No gasoil deals, no jet fuel trades

    OTHER NEWS
    - Fossil fuel consumption is set to shrink for the first time in modern history as climate
policies boost renewable energy while the coronavirus epidemic leaves a lasting effect on global
energy demand, BP said in a forecast.
    
    
    ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               41.19     0.39       0.96       40.80  GO-SIN
 GO 0.5 Diff                     -2.06     0.07      -3.29       -2.13  GO-SIN-DIF
 Spot Gas Oil 0.25%              41.43     0.39       0.95       41.04  GO25-SIN
 GO 0.25 Diff                    -1.82     0.07      -3.70       -1.89  GO25-SIN-DIF
 Spot Gas Oil 0.05%              41.83     0.45       1.09       41.38  GO005-SIN
 GO 0.05 Diff                    -1.42     0.13      -8.39       -1.55  GO005-SIN-DIF
 Spot Gas Oil 0.001%             42.62     0.39       0.92       42.23  GO10-SIN
 GO 0.001 Diff                   -0.63     0.07     -10.00       -0.70  GO10-SIN-DIF
 Spot Jet/Kero                   37.99     1.16       3.15       36.83  JET-SIN
 Jet/Kero Diff                   -1.10     0.12      -9.84       -1.22  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 Amy Caren Daniel)
  
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