February 5, 2020 / 11:17 AM / 14 days ago

Asia Distillates-Gasoil cash premiums hover near 5-week high

    SINGAPORE, Feb 5 (Reuters) - Asia's cash premiums for 10 ppm gasoil inched lower on
Wednesday, but was lingering close to their highest level in five weeks buoyed by steady buying
interest in the physical market so far this week.
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF slipped to 74 cents per barrel to Singapore
quotes, down 3 cents from the previous session. Tuesday's cash premiums were the highest since
Dec. 31. 
    Refining margins, also know as cracks, for gasoil with 10 ppm sulphur content
slipped to $11.51 per barrel over Dubai crude during Asian trading hours, down from $11.84 per
barrel on Tuesday.
    Meanwhile, cracks for jet fuel were at $9.61 per barrel over Dubai crude, down
from Tuesday's $9.64 a barrel.
    The jet fuel profits posted a record 34% monthly decline in January, and hit their lowest in
more than three and a half years on Monday, hurt by extensive travel restrictions and
cancellation of flights to China due to the coronavirus epidemic.
    Cash premiums for jet fuel JET-SIN-DIF fell to 10 cents per barrel over Singapore quotes
on Wednesday, down from 15 cents per barrel a day earlier.
    
    CHINA AVIATION DEMAND PLUNGES
    - China's aviation fuel sales slumped by a quarter at the end of January as domestic and
international air traffic shrank amid the epidemic, a senior oil industry source said on
Wednesday, adding first-quarter sales could be halved.
    - Between Jan. 24 and Jan. 31, aviation fuel sales in the world's second-largest consumer
fell nearly 25% from a year earlier to 555,000 tonnes, the Beijing-based source with direct
knowledge of the matter said. The number of flights seeking refuelling dropped by a similar
margin to 84,000 during the same week.
    - Jet fuel sales - for domestic and international flights - were 3.07 million tonnes in
January, 0.2% lower than the same month last year, said the source, who declined to be named
because he's not authorised to speak to the media.
    
    WEAK AIR CARGO DEMAND IN CHINA
    - Major air cargo carriers said they have no immediate plans to add China flights to replace
the capacity lost amid steep cuts to passenger travel due to the coronavirus, as many factories
have remained shut down after the Lunar New Year.
    - Aviation data firm OAG said there would be more than 25,000 fewer flights operated to,
from and within China this week compared with two weeks ago, with 30 airlines halting services. 
    About half of the air cargo carried globally is in the belly of passenger jets rather than
in dedicated freighters, and the flight cuts have made the Chinese market more dependent on
freight haulers.
    
    FUJAIRAH STOCKS
    - Middle-distillate inventories in the Fujairah Oil Industry Zone rose 1.5% from a week
earlier to 4.1 million barrels in the week to Feb. 3, data via S&P Global Platts showed.

    - Stocks of middle distillates in the Fujairah oil hub have averaged 3.8 million barrels so
far in 2020, compared with a weekly average of 2.4 million barrels in 2019, Reuters calculations
showed.
    
    API INVENTORY DATA
    - U.S. crude oil stocks rose in the most recent week, while gasoline inventories rose and
distillate stocks fell, data from industry group the American Petroleum Institute showed on
Tuesday.
    - Crude inventories rose by 4.2 million barrels in the week to Jan. 31 to 432.9 million
barrels, compared with analysts' expectations for a build of 2.8 million barrels.
    - Distillate fuel inventories, which include diesel and heating oil, fell by 1.8 million
barrels, compared with expectations for a 14,000-barrel draw, the data showed.
    
    SINGAPORE CASH DEALS
    - Three gasoil trades, one jet fuel deal.
    - For more information, click
    
    OTHER NEWS
    - The oil market looks set for at least four months of depressed demand because of China's
coronavirus outbreak, with a large crude surplus not expected to clear at least until August,
analysts and traders said.
    - Oil prices jumped by more than 3% on Wednesday on reports that scientists have developed
an effective drug against the fast-spreading coronavirus that has weighed heavily on global
economic activity.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                         
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                62.97    -0.98      -1.53       63.95  GO-SIN
 GO 0.5 Diff                      -1.96    -0.11       5.95       -1.85  GO-SIN-DIF
 Spot Gas Oil 0.25%               63.55    -1.11      -1.72       64.66  GO25-SIN
 GO 0.25 Diff                     -1.38    -0.24      21.05       -1.14  GO25-SIN-DIF
 Spot Gas Oil 0.05%               64.57    -1.20      -1.82       65.77  GO005-SIN
 GO 0.05 Diff                     -0.36    -0.33    1100.00       -0.03  GO005-SIN-DIF
 Spot Gas Oil 0.001%              65.68    -0.89      -1.34       66.57  GO10-SIN
 GO 0.001 Diff                     0.74    -0.03      -3.90        0.77  GO10-SIN-DIF
 Spot Jet/Kero                    62.80    -0.45      -0.71       63.25  JET-SIN
 Jet/Kero Diff                     0.10    -0.05     -33.33        0.15  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 Maju Samuel)
  
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