May 8, 2020 / 10:56 AM / 23 days ago

Asia Distillates-Jet fuel cracks post weekly drop amid subdued aviation demand

    SINGAPORE, May 8 (Reuters) - Asian refining margins for jet
fuel dropped on Friday to post a third straight weekly decline
as airlines continue to keep the majority of their fleets
grounded amid extended coronavirus lockdowns and border
restrictions in the region.
    Refining margins or cracks for jet fuel were at
a discount of $4.49 a barrel to Dubai crude during Asian trading
 on Friday following a holiday on Thursday, compared with minus
$4.24 a barrel in the previous session on Wednesday.
    Cracks for the aviation fuel have slumped 41% this week,
Refinitiv Eikon data showed.
    The jet fuel market has been the hardest hit from the
coronavirus crisis, and market watchers believe it might take
years to recover as airlines struggle to survive their worst
downturn with possible changes in travellers' flying habits.
    The bulk of air passengers come from budget airlines, but if
carriers are forced to hike ticket prices to share the burden of
operation costs with consumers, it would dampen passenger demand
going forward, a Singapore-based jet fuel trader said.
    Singapore Airlines and regional arm SilkAir have cut 96% of
capacity through the end of June, and low-cost unit Scoot has
cut 98% because of a lack of demand and travel restrictions
associated with the coronavirus pandemic.
    Cash differentials for jet fuel JET-SIN-DIF, which have
stayed in negative territory for more than two months now, were
at a discount of $3.39 a barrel to Singapore quotes on Friday.
They were at a discount of $3.58 per barrel on Wednesday.
    Meanwhile, cash discounts for 10 ppm gasoil GO10-SIN-DIF
were at $1.37 per barrel to Singapore quotes on Friday, compared
with Wednesday's $1.49 a barrel.
    Refining margins for the benchmark gasoil grade with 10 ppm
sulphur content in Singapore were at $3.37 a
barrel over Dubai crude on Friday, compared with $3.76 a barrel
on Wednesday.
    The cracks plunged to a record low earlier this week amid
signs of surging exports from India.
    
    ARA STOCKS
    - Gasoil stocks held independently in the
Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub
STK-GO-ARA rose 5.9% to 2.5 million tonnes in the week to May
7, data from Dutch consultancy Insights Global showed.
    - ARA jet fuel inventories STK-JET-ARA climbed 17.2% to
833,000 tonnes, the data showed.
    - Compared with a year earlier, jet fuel stocks were up
10.2%, while gasoil inventories were 4.3% lower.
    
    SINGAPORE CASH DEALS
    - No jet fuel trades, one gasoil deal
    - For more information, click
    
    OTHER NEWS
    - Oil prices rose on Friday and were on course for a second
consecutive week of gains as more countries moved ahead with
plans to relax economic and social lockdowns put in place to
halt the coronavirus pandemic and as more output was shut in.

    - Lockdowns to slow the coronavirus pandemic are pummelling
gas demand in the world's biggest buyers of liquefied natural
gas (LNG), pushing Asia's spot prices to record lows and forcing
some suppliers to start cutting output.
    
    ASSESSMENTS    
 MID-DISTILLATES                                                                         
 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                 28.77    -1.18      -3.94       29.95  GO-SIN
 GO 0.5 Diff                       -4.55     0.15      -3.19       -4.70  GO-SIN-DIF
 Spot Gas Oil 0.25%                29.26    -1.18      -3.88       30.44  GO25-SIN
 GO 0.25 Diff                      -4.06     0.15      -3.56       -4.21  GO25-SIN-DIF
 Spot Gas Oil 0.05%                29.37    -1.17      -3.83       30.54  GO005-SIN
 GO 0.05 Diff                      -3.95     0.16      -3.89       -4.11  GO005-SIN-DIF
 Spot Gas Oil 0.001%               31.95    -1.21      -3.65       33.16  GO10-SIN
 GO 0.001 Diff                     -1.37     0.12      -8.05       -1.49  GO10-SIN-DIF
 Spot Jet/Kero                     20.90    -0.81      -3.73       21.71  JET-SIN
 Jet/Kero Diff                     -3.39     0.19      -5.31       -3.58  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 Emelia
Sithole-Matarise)
  
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