SINGAPORE, Sept 23 (Reuters) - Asia's cash discounts for jet fuel narrowed marginally on Wednesday as the front-month spread slimmed its contango, but refining margins for the fuel dropped to their weakest in four sessions amid persistent weakness in aviation demand. Refining margins or cracks for jet fuel in Singapore were at a discount of 97 cents per barrel to Dubai crude during Asian trading hours, compared with minus 45 cents per barrel on Tuesday. The jet cracks are expected to remain under pressure until winter heating demand for kerosene picks up, market watchers said. Jet fuel and kerosene belong to the same grade of oil products with jet margins determining the profitability of both. Several Asian airlines are resorting to sightseeing flights that take off and land at the same airport to get travellers flying amid border restrictions, and generate some revenue as they struggle to survive their worst downturn. But these flights will not be sufficient to help support the jet fuel market, which has been hurt the most due to the coronavirus pandemic, trade sources said. "'Flights to nowhere' is a luxury demand. Between a 'flight to nowhere' versus 'staycation', I would prefer the latter," a Singapore-based jet fuel trader said. Cash discounts for jet fuelwere at $1.15 a barrel to Singapore quotes on Wednesday, compared with $1.17 per barrel a day earlier. The October/November time spread for jet fuel traded at a discount of 67 cents a barrel on Wednesday, Refinitiv Eikon data showed. INVENTORIES - Middle-distillate inventories in the Fujairah Oil Industry Zone rose 24.1% to 4.7 million barrels in the week ended Sept. 21, data via S&P Global Platts showed. - The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared with a weekly average of 2.4 million barrels in 2019, Reuters calculations showed. - Meanwhile, U.S. distillate fuel inventories fell by 2.1 million barrels, compared with expectations for a draw of 648,000 barrels, data from industry group the American Petroleum Institute (API) showed on Tuesday. SINGAPORE CASH DEALS - One gasoil deal, no jet fuel trades OTHER NEWS - Oil steadied on Wednesday, trading close to $42 a barrel, with a report that U.S. crude inventories unexpectedly rose capping prices and as growing numbers of coronavirus cases around the world raised concern of stalling demand. ASSESSMENTS MID-DISTILLATES CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Spot Gas Oil 0.5% 41.81 -0.38 -0.90 42.19 GO 0.5 Diff -2.00 0.01 -0.50 -2.01 Spot Gas Oil 0.25% 42.06 -0.38 -0.90 42.44 GO 0.25 Diff -1.75 0.01 -0.57 -1.76 Spot Gas Oil 0.05% 42.51 -0.39 -0.91 42.90 GO 0.05 Diff -1.30 0.00 0.00 -1.30 Spot Gas Oil 0.001% 43.22 -0.41 -0.94 43.63 GO 0.001 Diff -0.59 -0.01 1.72 -0.58 Spot Jet/Kero 39.51 -0.40 -1.00 39.91 Jet/Kero Diff -1.15 0.02 -1.71 -1.17 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 Robert Birsel)
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