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Asia middle distillates: Key market indicators for Jan. 3-7

Asia’s middle distillate markets started the Jan. 3-7 trading week on a steady note as market participants await fresh pricing cues following the year-end festive season.

Jet fuel/Kerosene

** Brokers pegged balance month January-February jet fuel/kerosene time spread at plus 12 cents/b at 0200 GMT Jan. 3, widening 3 cents/b from plus 9 cents/b at 0430 GMT Asian close on Dec. 31, Platts data showed.

** The FOB Singapore jet fuel/kerosene cash differential was assessed at minus 5 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments on Dec. 31, losing 2 cents/b on the day and 57 cents/b in the span of just six trading days, Platts data showed.

** The Asian jet fuel/kerosene could see downward pressure as COVID-19 continued to impact air travel, with many Asian countries pursuing restrictions and movement checks during the Christmas and New Year holiday season to stem the spread of the omicron variant of the coronavirus.

** In India, the Directorate General of Civil Aviation extended the suspension of scheduled international commercial passenger flights to or from India till Jan. 31, 2022, revising from its plan to reopen international borders on Dec. 15. Elsewhere in Singapore, the Civil Aviation Authority of Singapore said in a statement Dec. 22 that with effect from Dec. 22, 23:59 hours (Singapore time), there will be no new ticket sales on designated Vaccinated Travel Lane flights for entry into Singapore from all VTL countries until Jan. 20 2022, 23:59 hours (Singapore time).

** The Q1-Q2 2022 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged plus 87 cents/b over Dec. 28-31, down from plus $1.16/b the week before.
Gasoil

** Brokers pegged balance month January-February Singapore gasoil at plus 72 cents/b at 0200 GMT Jan. 3, inching down 3 cents/b from the 0430 GMT Asian close on Dec. 31. [closed at 75 cents/b]

** The January Exchange of Futures for Swaps spread was pegged at minus $8.00/mt at 0200 GMT Jan. 3, narrowing from minus $8.22/mt at the Dec. 31 close, Platts data showed.

** Traders said sentiment in the Asian gasoil market remained steady to slightly higher, with regional demand gaining traction as several countries moved away from zero COVID-19 policies, while others are resisting a return to lockdowns despite rising cases of infection fueled by omicron.

** Still, Singapore’s gasoil exports fell 71.92% week on week to 107,731 mt over Dec. 23-29, Enterprise Singapore data released late Dec. 30 showed. Total gasoil imports edged 3.48% higher on the week to 149,428 mt. The dip in exports came amid the year-end festivities, which saw a corresponding slowdown in trade activity. In addition, with East-West arbitrage economics remaining unviable, this has left some Asian barrels stuck within the region.

** The Q1-Q2 2022 gasoil swap spread averaged plus $1.57/b over Dec. 28-31, up from plus $1.46/b the week before.
Source: Platts

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