July 6, 2020 / 10:52 AM / a month ago

Asia Distillates-Jet cash discounts narrow; market recovery still afar

    SINGAPORE, July 6 (Reuters) - Asia's cash discounts for jet
fuel narrowed on Monday amid hopes for firmer aviation demand in
coming months though traders  remained worried the market would
stay under pressure as long as international travel restrictions
are in place.
    Cash differentials for jet fuel in Singapore JET-SIN-DIF
were at a discount of 44 cents a barrel to Singapore quotes on
Monday, compared with a 55-cent discount on Friday.
    Refining margins or cracks for jet fuel slipped
to $1.79 a barrel over Dubai crude during Asian trading hours,
compared with $1.91 per barrel on Friday.
    The jet cracks have gained over 10% in the last month, but
they are still at their weakest seasonal levels on record for
this time of the year, according to Refinitiv Eikon data that
goes back to 2009.
    "Air traffic will recover in domestic and cargo first, and
improvement in international travel will come much later," said
Sri Paravaikkarasu, director for Asia oil at consultancy FGE.
    "We assume Asian domestic jet fuel demand to return to
year-ago levels by end of 2020 or beginning of 2021. However,
international jet fuel consumption will still be below its
end-2019 level at the end of 2021."
    The regrade, which is the price spread between jet and
gasoil, for August stood at a discount of $4.30 a barrel on
Monday, prompting refiners to continue minimizing jet fuel
production.
    Cash premiums for 10-ppm gasoil GO10-SIN-DIF were at 62
cents a barrel to Singapore quotes on Monday, down from 67 cents
per barrel on Friday.
    
    SINGAPORE CASH DEALS
    - No gasoil deals, no jet fuel trades
    
    OTHER NEWS
    - Singapore's High Court has appointed an independent
supervisor to oversee the restructuring of trader Hontop Energy.

    - Global supply of fuel oil, used by ships and power plants,
is expected to grow in the third quarter, depressing the marine
fuel market as shipping demand remains weak, analysts and trade
sources said.

    ASSESSMENTS
 MID-DISTILLATES                                                                           
 CASH ($/T)               ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                  49.21     0.93       1.93       48.28  GO-SIN
 GO 0.5 Diff                        -0.83    -0.03       3.75       -0.80  GO-SIN-DIF
 Spot Gas Oil 0.25%                 49.85     0.93       1.90       48.92  GO25-SIN
 GO 0.25 Diff                       -0.19    -0.03      18.75       -0.16  GO25-SIN-DIF
 Spot Gas Oil 0.05%                 50.54     0.83       1.67       49.71  GO005-SIN
 GO 0.05 Diff                        0.50    -0.13     -20.63        0.63  GO005-SIN-DIF
 Spot Gas Oil 0.001%                50.66     0.91       1.83       49.75  GO10-SIN
 GO 0.001 Diff                       0.62    -0.05      -7.46        0.67  GO10-SIN-DIF
 Spot Jet/Kero                      43.67     0.87       2.03       42.80  JET-SIN
 Jet/Kero Diff                      -0.44     0.11     -20.00       -0.55  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 Emelia
Sithole-Matarise)
  
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