March 26, 2020 / 10:56 AM / 6 days ago

Asia Distillates-Jet fuel refining margins slip as aviation sector struggles

    SINGAPORE, March 26 (Reuters) - Asian refining margins for jet fuel dipped on Thursday as
global airlines have kept most of their flights grounded to prevent the spread of the
coronavirus.
    Refining margins or cracks for jet fuel fell on Thursday to $2.29 a barrel over
Dubai crude during Asian trade, down from $2.51 per barrel a day earlier.
    Cracks for the aviation fuel are currently over 71% lower than the historical average for
this time of the year in the last 12 years, Refinitiv Eikon data showed.
    Global airlines have grounded flights on international as well as domestic routes as
countries around the world try to contain the pandemic, which has killed more than 21,000
people. 
    The International Air Transport Association (IATA) said on Thursday it has written to the
heads of government of 18 countries in the Asia-Pacific region, appealing for emergency support
to airlines due to the loss in air travel demand from the outbreak.
    The states include Bangladesh, India, Japan, Malaysia, Pakistan, Philippines, Republic of
Korea, Thailand and Vietnam, IATA said.
    "Airlines are fighting for survival in every corner of the world. Travel restrictions and
evaporating demand mean that, aside from cargo, there is almost no passenger business," IATA
Chief Executive Alexandre de Juniac said in a statement.
    "There is a small and shrinking window for governments to provide a lifeline of financial
support to prevent a liquidity crisis from shuttering the industry."
    Cash discounts for jet fuel JET-SIN-DIF widened to $2.45 per barrel to Singapore quotes on
Thursday, the widest since November 2008. They were at a discount of $2.28 per barrel on
Wednesday.
    Meanwhile, cash differentials for 10 ppm gasoil GO10-SIN-DIF also widened their discounts
to 40 cents per barrel to Singapore quotes on Thursday, compared with a 31-cent discount in the
previous session.
    Refining margins, also known as cracks, for gasoil with 10 ppm sulphur content
inched lower to $10.17 per barrel over Dubai crude on Thursday, from $10.26 per barrel on
Wednesday.
    The regrade, the price spread between jet and gasoil, for April stood at minus
$7.18 per barrel on Thursday, compared minus $7.05 on Wednesday.
    
    SINGAPORE INVENTORIES
    - Singapore onshore middle distillate stocks rose 6.5% to a six-month high of 13.1 million
barrels in the week ended March 25, Enterprise Singapore data showed.
    - Weekly middle distillate inventories have averaged 11.3 million barrels so far in 2020,
compared with 11.1 million barrels in 2019, Reuters calculations showed.
    - Overall, onshore middle distillate inventories were 15.2% higher year-on-year.
    
    EIA INVENTORIES
    - U.S. crude oil stockpiles rose last week, but one-week demand for fuels showed its biggest
drop since December in the first inkling that the coronavirus pandemic is denting the country's
energy demand.
    - Distillate stockpiles, which include diesel and heating oil, fell by 679,000
barrels in the week to 124.4 million barrels, versus expectations for a 1.9 million-barrel drop.
    
    SINGAPORE CASH DEALS
    - No jet fuel trades, no gasoil deals
    - For more information, click
    
    OTHER NEWS
    - Oil prices fell on Thursday following three days of gains, with the prospect of rapidly
dwindling demand due to coronavirus travel bans and lockdowns offsetting hopes a U.S. $2
trillion emergency stimulus will shore up economic activity.
    - From Canada and the Caribbean to the Baltic and Singapore, oil tanks around the world are
filling fast, despite a 50%-100% jump in lease costs, as oil companies and traders scramble to
park unwanted crude and refined products.

    ASSESSMENTS
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               36.30    -1.60      -4.22       37.90  GO-SIN
 GO 0.5 Diff                     -2.20    -0.09       4.27       -2.11  GO-SIN-DIF
 Spot Gas Oil 0.25%              36.54    -1.60      -4.20       38.14  GO25-SIN
 GO 0.25 Diff                    -1.96    -0.09       4.81       -1.87  GO25-SIN-DIF
 Spot Gas Oil 0.05%              37.23    -1.60      -4.12       38.83  GO005-SIN
 GO 0.05 Diff                    -1.27    -0.09       7.63       -1.18  GO005-SIN-DIF
 Spot Gas Oil 0.001%             38.10    -1.60      -4.03       39.70  GO10-SIN
 GO 0.001 Diff                   -0.40    -0.09      29.03       -0.31  GO10-SIN-DIF
 Spot Jet/Kero                   28.30    -1.74      -5.79       30.04  JET-SIN
 Jet/Kero Diff                   -2.45    -0.17       7.46       -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 Sherry Jacob-Phillips)
  
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