Asia Distillates-Jet fuel cracks inch up; renewed travel bans likely to hurt recovery

Asian refining margins for jet fuel inched higher on Monday, but reimposed travel restrictions in several countries to slow the spread of a highly-infectious coronavirus variant is expected to dent passenger demand recovery.

Refining margins, also known as cracks, for jet fuel ticked up 5 cents to $4.76 per barrel over Dubai crude during Asian trading hours.

The cracks, however, have shed 11% since hitting a more than nine-month high of $5.35 per barrel on Dec. 18.

Philippines on Saturday extended a ban on flights from the United Kingdom by another two weeks to mid-January in a bid to prevent the spread of the new coronavirus variant, while Japan said it would temporarily ban non-resident foreign nationals from entering the country.

Cash differentials for jet fuel JET-SIN-DIF were at a discount of 10 cents per barrel to Singapore quotes on Monday, compared with a discount of 11 cents a barrel in the last trading session on Thursday.

The aviation fuel market is getting some support from air cargo demand, which has firmed in recent weeks as e-commerce deliveries surged during the holiday season, market watchers said.

Meanwhile, airlines are also expected to play a vital role in the mass vaccine rollout in coming days, which is expected to unlock an immediate boost for the sector.

CHINA’S FIRST BATCH OF 2021 FUEL EXPORT QUOTAS
– China has issued its first batch of 2021 quotas for exports of refined fuel totalling 29.5 million tonnes to seven firms, including a private refiner, according to the blog of a state-run energy exchange and one of the recipient companies.

– That volume is 5.4% higher than the quota of 27.99 million tonnes in the first issue of 2020.

– The recipients are CNPC, Sinopec, CNOOC, Sinochem, China National Aviation Oil Company, defence conglomerate Norinco and private refiner Zhejiang Petrochemical Corp, the official blog of state-run Shanghai Petroleum and Natural Gas Exchange showed.

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

OTHER NEWS
– Oil prices edged higher on Monday after U.S. President Donald Trump signed a $2.3 trillion coronavirus aid and spending package, although lingering worries about near-term demand weighed on the market.

 ASSESSMENTS
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               55.79    -0.36      -0.64       56.15  GO-SIN
 GO 0.5 Diff                     -1.46    -0.01       0.69       -1.45  GO-SIN-DIF
 Spot Gas Oil 0.25%              55.89    -0.36      -0.64       56.25  GO25-SIN
 GO 0.25 Diff                    -1.36    -0.01       0.74       -1.35  GO25-SIN-DIF
 Spot Gas Oil 0.05%              55.99    -0.36      -0.64       56.35  GO005-SIN
 GO 0.05 Diff                    -1.26    -0.01       0.80       -1.25  GO005-SIN-DIF
 Spot Gas Oil 0.001%             57.22    -0.36      -0.63       57.58  GO10-SIN
 GO 0.001 Diff                   -0.03    -0.01      50.00       -0.02  GO10-SIN-DIF
 Spot Jet/Kero                    55.5    -0.29      -0.52       55.79  JET-SIN
 Jet/Kero Diff                    -0.1     0.01      -9.09       -0.11  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 Shailesh Kuber)