July 20, 2020 / 11:18 AM / 16 days ago

Asia Distillates-Jet cracks drop as renewed virus wave dampens demand recovery

    SINGAPORE, July 20 (Reuters) - Asian refining margins for jet fuel slipped on Monday despite
weaker crude prices as a renewed wave of coronavirus infections have fuelled fresh concerns over
demand recovery with international flights now expected to remain grounded for a longer period
of time.
    Refining margins, also known as cracks, for jet fuel were at $2.10 a barrel
over Dubai crude during Asian trade on Monday, 22 cents lower from Friday.
    The cracks have eased about 39% over the last month after recovering partly from their worst
of the coronavirus crisis in May as governments relaxed in-country travel restrictions and
regional airlines resumed domestic flights. 
    But the aviation fuel market would continue to stay under pressure as long as countries have
border restrictions in place and long-haul flight are out of operation, trade sources said.
    "By now it is sadly evident that we are not winning the fight against the virus, at least in
terms of stemming new infections," JBC Energy said in a note on Monday.
    "We recognise that further improvements in (oil) demand will be difficult to achieve, but
also do not expect a return to April and May lows." 
    Australia's acting chief medical officer said a surge in COVID-19 cases in the country's
second-biggest city Melbourne could take weeks to subside, while India's coronavirus cases
jumped by 40,425 cases in a day to touch 1.1 million by Monday morning.
    Cash differentials for jet fuel JET-SIN-DIF were at a discount of 37 cents a barrel to
Singapore quotes on Monday, compared with a 36-cent discount on Friday.
    The front-month time spread for the aviation fuel in Singapore widened its
contango structure to trade at a discount of 48 cents per barrel, Refinitiv Eikon data showed.
    - Five gasoil deals, no jet fuel trades
    - Oil prices dropped on Monday, amid concerns that a recovery in fuel demand could be
derailed by a rise in the pace of coronavirus infections around the world.
    - BP has put four traders responsible for Chinese crude oil sales on temporary leave
as it conducts internal investigations into trades with Singapore's Hontop Energy, four sources
familiar with the matter said.

 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close    RIC
 Spot Gas Oil 0.5%                 47.68    -0.47      -0.98         48.15  GO-SIN
 GO 0.5 Diff                       -0.90     0.01      -1.10         -0.91  GO-SIN-DIF
 Spot Gas Oil 0.25%                48.32    -0.47      -0.96         48.79  GO25-SIN
 GO 0.25 Diff                      -0.26     0.01      -3.70         -0.27  GO25-SIN-DIF
 Spot Gas Oil 0.05%                49.13    -0.47      -0.95         49.60  GO005-SIN
 GO 0.05 Diff                       0.55     0.01       1.85          0.54  GO005-SIN-DIF
 Spot Gas Oil 0.001%               49.26    -0.56      -1.12         49.82  GO10-SIN
 GO 0.001 Diff                      0.69    -0.07      -9.21          0.76  GO10-SIN-DIF
 Spot Jet/Kero                     43.61    -0.45      -1.02         44.06  JET-SIN
 Jet/Kero Diff                     -0.37    -0.01       2.78         -0.36  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 Shailesh Kuber)
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