Asia middle distillates: Key market indicators for Dec 6-10
Asian middle distillate markets started Dec. 6-10 slightly weaker than the previous trading week as participants awaited fresh pricing cues for gasoil and jet fuel/kerosene.
At 10 am Singapore time (0200 GMT), the ICE February Brent crude oil futures contract stood at $71.33/b, up $1.45/b (2.07%) from the Dec. 3 Asian close.
** Brokers pegged the December-January jet fuel/kerosene time spread at plus 50 cents/b at 0200 GMT Dec. 6, narrowing 8 cents/b from plus 58 cents/b at 0830 GMT Asian close Dec. 3, S&P Global Platts data showed.
** The FOB Singapore jet fuel/kerosene cash differential was assessed at plus 50 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessment Dec. 3, up from plus 30 cents/b from Nov. 29, Platts data showed.
** The Asian jet fuel/kerosene market remains resilient as participants focus on the upcoming peak season for heating oil and tight regional supply, despite concerns stemming from the new COVID-19 variant, sources said.
** The impact of government responses to the new omicron variant was a concern, the International Air Transport Association said in a report Dec. 1. “If it dampens travel demand, capacity issues will become more acute. After almost two years of COVID-19, governments have the experience and tools to make better data-driven decisions than the mostly knee-jerk reactions to restrict travel that we have seen to date,” IATA director General Willie Walsh said in the report.
** The Q1-Q2 2022 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged plus 80 cents/b over Nov. 29-Dec. 3, down from plus $1.21/b the week before.
** Brokers pegged the December-January gasoil market structure at plus 60 cents/b at 0200 GMT Dec. 6, narrowing 6 cents/b from the 0830 GMT Asian close Dec. 3.
** The December Exchange of Futures for Swaps spread was pegged at minus $12.80/mt at 0200 GMT Dec. 6, narrowing from minus $16.57/mt at the Dec. 3 Asian close, Platts data showed.
** The near-term outlook for Asian gasoil was subdued, industry sources said, with the diversion of arbitrage cargoes into the region and uneven demand recovery weighing on sentiment.
** Singapore middle distillate stocks fell 5.24% week on week to a three-year low of 8.01 million barrels in the week ended Dec. 1, Enterprise Singapore data released Dec. 2 showed, aided by a recovery in regional demand. Singapore’s gasoil exports fell 37.09% on the week to 206,636 mt, while gasoil imports fell 30.43% to 228,198 mt.
** The Q1-Q2 2022 gasoil swap spread averaged plus $1.04/b over Nov. 29-Dec. 3, down from plus $1.33/b the week before.