Asia Distillates-Jet fuel cracks post biggest weekly jump in six
Asian refining margins for jet fuel slipped on Friday, but posted their biggest weekly rise in 1-1/2 months, buoyed by a slight uptick in regional aviation demand and steady arbitrage shipments to the West.
Refining margins, also known as cracks, for jet fuel fell to $6.19 per barrel over Dubai crude during Asian trading hours, 28 cents lower from a day earlier.
The cracks for the aviation fuel in Singapore, however, gained about 13% this week, their steepest weekly rise since April 23, Refinitiv Eikon data showed.
Cash discounts for jet fuel JET-SIN-DIF widened to 50 cents per barrel to Singapore quotes, compared with a 25-cent discount on Thursday.
TRADERS RAMP UP ASIAN JET FUEL EXPORTS TO THE WEST
Global oil trading companies are ramping up jet fuel exports from Asia to Europe and the United States, as widespread anti-coronavirus vaccinations and relatively lower infection rates allow commercial travel to resume faster in Western countries.
The strong demand from the West has fully drawn down surplus jet fuel stored on ships around Singapore, while refiners’ margins for the aviation fuel – a big drag on overall profits during the COVID-19 pandemic – have nearly trebled since end-March.
Asia exported about 417,000 barrels per day (bpd) of jet fuel to Europe and North America combined in April-May, nearly 32% higher than 316,000 bpd for February-March period, according to Reuters calculations based on data from oil analytics firm Vortexa.
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub STK-GO-ARA rose 4.6% to 2.3 million tonnes in the week ended June 3, data from Dutch consultancy Insights Global showed.
ARA jet fuel inventories STK-JET-ARA slipped 3.2% this week to 1.1 million tonnes.
U.S. distillate stockpiles rose by 3.7 million barrels in the week to May 28, versus expectations for a 1.5 million barrel drop, the Energy Information Administration said on Thursday.
Taiwan’s CPC was looking to sell 300,000 barrels of jet fuel for July 1-15 loading from Kaohsiung, a broker source said.
SINGAPORE CASH DEALS
Two gasoil trades, one jet fuel deal
Oil rose towards $72 a barrel on Friday, trading close to a two-year high as OPEC+ supply discipline and recovering demand countered concerns about patchy COVID-19 vaccination rollout around the globe.
Source: Reuters (Reporting by Koustav Samanta; Editing by Rashmi Aich)