Asia Distillates-Jet fuel cracks drop to near 4-week low

Asian refining margins for jet fuel dropped on Tuesday to their lowest level in nearly four weeks, as regional aviation demand continued to struggle amid persistent coronavirus restrictions.

Refining margins, or cracks, for jet fuel in Singapore fell 27 cents to $5.68 per barrel over Dubai crude during Asian trading hours, their lowest since April 28.

The cracks are currently about 58% lower when compared with their levels for this time of the year in pre-pandemic 2019, Refinitiv Eikon data showed.

Global airlines have removed 6.9 million scheduled seats during this month due to lockdowns across various parts of the world, aviation data firm OAG said in a statement.

China’s scheduled capacity in the week to Monday dropped to 16.9 million seats, down from 17.2 million seats a week earlier, OAG data showed. China, however, still remains the only major market in the region that posted a gain in capacity over the corresponding week in 2019.

India’s scheduled capacity slumped by about 223,000 seats week-on-week, while Japan’s capacity dropped by around 95,000 seats from a week ago, OAG data showed.

Cash differentials for jet fuel JET-SIN-DIF widened their discounts to 37 cents per barrel to Singapore quotes, compared with a 30-cent discount a day earlier.

SINGAPORE CASH DEALS

• One jet fuel deal, no gasoil trades
• BP bought 100,000 barrels of jet fuel from Shell for June 9-13 loading at a discount of 50 cents a barrel to June Singapore quotes.

OTHER NEWS

• Western powers prepared to pile sanctions on Belarus and cut off its aviation links on Monday, furious after it scrambled a warplane to intercept a Ryanair aircraft and arrest a dissident journalist, an act one official denounced as ‘state piracy’.
• Oil prices rose for a third day on Tuesday, holding around one-week highs after jumping more than 3% the previous session as investors tempered previous expectations of an early return of oil exporter Iran to international crude markets.

ASSESSMENTS
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               72.74     0.96       1.34       71.78  GO-SIN
 GO 0.5 Diff                      -2.2     0.01      -0.45       -2.21  GO-SIN-DIF
 Spot Gas Oil 0.25%              72.94     0.95       1.32       71.99  GO25-SIN
 GO 0.25 Diff                       -2        0       0.00          -2  GO25-SIN-DIF
 Spot Gas Oil 0.05%              73.08     0.96       1.33       72.12  GO005-SIN
 GO 0.05 Diff                    -1.86     0.01      -0.53       -1.87  GO005-SIN-DIF
 Spot Gas Oil 0.001%             75.12     0.95       1.28       74.17  GO10-SIN
 GO 0.001 Diff                    0.18        0       0.00        0.18  GO10-SIN-DIF
 Spot Jet/Kero                   72.01     0.89       1.25       71.12  JET-SIN
 Jet/Kero Diff                   -0.37    -0.07      23.33        -0.3  JET-SIN-DIF
 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

Source: Reuters (Reporting by Koustav Samanta; Editing by Subhranshu Sahu)