July 23, 2020 / 11:14 AM / 12 days ago

Asia Distillates-Jet fuel refining margins slip on fragile demand

    SINGAPORE, July 23 (Reuters) - Asian refining margins for jet fuel eased on
Thursday, weighed down by lingering concerns over aviation demand with majority of
international flights remaining grounded as coronavirus cases surge across several
countries.
    Refining margins, also known as cracks, for jet fuel were at $2.03 a
barrel over Dubai crude during Asian trading hours, down 24 cents from a day earlier.
    The cracks, which hit a record low in early May, found some support after
governments relaxed travel restrictions for domestic flights but that has proved to be
insufficient to help the market for a sustainable recovery, traders said.
    "The jet fuel market in Asia is still very volatile. Any strength in demand is not
sustainable," a Singapore-based trader said.
    Cash discounts for jet fuel JET-SIN-DIF were at a discount of 32 cents a barrel to
Singapore quotes on Thursday, compared with 38 cents in the previous session.
    
    INVENTORIES
    - Singapore onshore middle distillate stocks rose 5.6% to 14.1 million barrels in
the week ended July 22, the highest level in six weeks, Enterprise Singapore data
showed.
    - The weekly Singapore middle distillate inventories have averaged at 12.9 million
barrels so far in 2020, Reuters calculations showed. This week's stocks were up 33.7%
year-on-year.
    - U.S. distillate stockpiles rose 1.1 million barrels to 177.9 million barrels in
the week to July 17, their highest since December 1982, data from the Energy Information
Administration showed on Wednesday. Analysts had expected a 618,000-barrel drop.
    
    CHINA'S DIESEL EXPORTS PLUNGE IN JUNE
    - China's diesel exports in June fell by 50% from a year earlier to the lowest since
September 2018 as lockdown measures around the world to halt the coronavirus outbreak
continued to curb fuel demand.
    - China exported 1.04 million tonnes of diesel, compared with 1.45 million tonnes in
May and 2.07 million tonnes in June 2019, data from the General Administration of
Customs showed.
    - China's jet kerosene exports in June dropped 38% from a year earlier to 770,000
tonnes, compared to 560,000 tonnes in May, customs data showed.
    
    SINGAPORE CASH DEALS
    - No gasoil deals, no jet fuel trades
    
    OTHER NEWS
    - South Korea's top budget carrier Jeju Air Co Ltd said on Thursday it
has decided to scrap a deal agreed in principle to take over smaller Korean peer Eastar
Jet, after the industry was hit by air travel slump amid the coronavirus outbreak.

    
    ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                50.33     0.58       1.17       49.75  GO-SIN
 GO 0.5 Diff                      -0.91    -0.01       1.11       -0.90  GO-SIN-DIF
 Spot Gas Oil 0.25%               50.97     0.58       1.15       50.39  GO25-SIN
 GO 0.25 Diff                     -0.27    -0.01       3.85       -0.26  GO25-SIN-DIF
 Spot Gas Oil 0.05%               51.78     0.58       1.13       51.20  GO005-SIN
 GO 0.05 Diff                      0.54    -0.01      -1.82        0.55  GO005-SIN-DIF
 Spot Gas Oil 0.001%              51.77     0.50       0.98       51.27  GO10-SIN
 GO 0.001 Diff                     0.53    -0.09     -14.52        0.62  GO10-SIN-DIF
 Spot Jet/Kero                    45.65     0.29       0.64       45.36  JET-SIN
 Jet/Kero Diff                    -0.32     0.06     -15.79       -0.38  JET-SIN-DIF
                                                                                        
 For a list of derivatives prices, including margins, please double                     
 click the RICs below.                                                   
 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                                                                     
 
 (Reporting by Koustav Samanta; Editing by Rashmi Aich)
  
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