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Asia middle distillates: Key market indicators this week

Asian middle distillate complex is unlikely to see major change in the week starting April 19. The gasoil market continues to trade steadily amid balanced supply, while in the jet fuel/kerosene arena, some respite could be seen as the air travel bubble between Australia and New Zealand begins April 19, supporting market sentiment.

Jet fuel/Kerosene

** The front-month May-June jet fuel/kerosene time spread was pegged at minus 26 cents/b at 0200 GMT April 19, narrowing 1 cent/b from minus 27 cents/b at the 0830 GMT Asian close on April 16, S&P Global Platts data showed.

** The FOB Singapore jet fuel/kerosene cash differential rose to an eight-week high of minus 13 cents/b to Mean of Platts Singapore jet fuel/kerosene assessment on April 16, rising 27 cents/b, or 67.5%, day on day. This marks its highest level since Feb. 17, Platts data showed.

** Industry sources are also eyeing the ongoing travel bubble discussions between Singapore and Hong Kong, which is said to be active. Singapore’s Minister for Transport Ong Ye Kung said in a media release April 13 that both countries are finalizing the details of the revised agreement and hope to announce their plans soon.

** Singapore was a net exporter of aviation fuels and kerosene in the week ended April 14, with bulk of the jet fuel/kerosene exports headed for Australia. Industry sources said that the ongoing border controls and rigid travel restrictions in the region will weigh on jet fuel demand.

** The third quarter-fourth quarter jet fuel/kerosene swap spread — an indication of near-term sentiment — averaged minus 44 cents/b April 12-16, narrowing 11 cents/b from the previous week’s average of minus 55 cents/b.

Gasoil

** The front-month May-June gasoil market structure was pegged at minus 14 cents/b at 0200 GMT April 12, unchanged from the Asian close on April 16, Platts data showed.

** The May Exchange of Futures for Swaps, or EFS, spread was pegged at minus $3.50/mt at 0200 GMT April 12, narrowing from an assessed minus $4.11/mt at the April 16 close.

** A more balanced outlook for the Asian gasoil market was seen, with some traders saying that lower export volumes from China for May could even out the recent flurry of spot supply cargoes being pushed into the market from North Asian refiners.

** Some additional support is also expected from newbuild VLCCs heard to be on the way towards Singapore. These supertankers, which can typically load 280,000 mt, or 2.05 million barrels of gasoil when fully laden, can help in draining out surplus volumes from the region which will aid in keeping supply balances in check, traders said.

** The third quarter-fourth quarter gasoil swap spread — an indication of near-term sentiment — averaged plus 8 cents/b April 12-16, widening from the previous week’s average of 3 cents.
Source: Platts

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