January 24, 2020 / 7:07 AM / a month ago

Asia Distillates-Jet cracks post weekly drop, China virus likely to curb holiday travel

    SINGAPORE, Jan 24 (Reuters) - Asian jet fuel refining margins rose on Friday but posted a
third straight weekly decline amid weak buying interest, while traders were concerned seasonal
aviation demand during the Lunar New Year holiday would be hit due to an outbreak of a new
respiratory virus from China.
    Airlines and passengers were on guard against the flu-like virus that originated in the
central Chinese city of Wuhan.
    Refining margins, also known as cracks, for jet fuel climbed to $11.55 per
barrel over Dubai crude during Asian trading hours, up from $10.83 per barrel on Thursday. The
cracks had dropped to $10.72 a barrel on Wednesday, their lowest since June 2017.
    The jet profits, which have shed about 3% this week, are currently at their lowest levels
for this time of the year since 2016, Refinitiv Eikon data showed.
    China's week-long New Year holiday, starting this Saturday, typically boosts aviation
passenger demand, but holiday travel would be hit this year due to the new coronavirus that has
killed 25 people in China and infected more than 800.
    Global health authorities fear the transmission rate will accelerate as hundreds of millions
of Chinese travel at home and abroad during the holiday. The World Health Organisation has
declared it an emergency but stopped short of declaring the epidemic of international concern.
    Singapore Airlines' budget carrier, Scoot, has suspended its daily flights to China's Wuhan
after authorities locked down the city, while Thai AirAsia has suspended all flights between
Thailand and Wuhan until Jan. 28.
    Hong Kong's Cathay Pacific Airways Ltd said passengers to and from Wuhan could change or
cancel flights for free through March 31.
    Meanwhile, jet fuel refining margins have also taken a beating in recent weeks as
warmer-than-normal winter temperatures in northeast Asia this year have curbed seasonal demand
for heating kerosene that belongs to the same grade of oil products as jet fuel.
    Cash premiums for jet fuel JET-SIN-DIF dipped to 40 cents per barrel over Singapore quotes
on Friday, compared with 45 cents per barrel on Thursday.
    Cash premiums for 10 ppm gasoil in Singapore GO10-SIN-DIF were at 21 cents a barrel to
Singapore quotes, down from 22 cents per barrel a day earlier.
    Cracks for gasoil with 10 ppm sulphur content rose to $12.73 per barrel over
Dubai crude, compared with Thursday's $12.01 a barrel.
    - India's diesel exports fell in December from a month ago, but were 38% higher than a year
earlier, government data showed.
    - Diesel exports dipped nearly 4% to 3.14 million tonnes in December from 3.27 million
tonnes in November.
    - Domestic sales of diesel are expected to grow at the slowest pace in five years in 2019/20
as the country's car fleet shifts predominantly to gasoline, trucks get more efficient and solar
pumps displace diesel-fed units across the countryside.
    - India exported about 660,000 tonnes of jet fuel in December, compared with 710,000 tonnes
in November and 650,000 tonnes in December 2018, the data showed.
    - India's overall refined fuel exports rose 24.2% in December year-on-year to 6.46 million
tonnes, the fastest growth since October 2016, data from the petroleum ministry showed, as a
broader economic slowdown dented local demand.
    - Gasoil stocks independently held in the Amsterdam-Rotterdam-Antwerp (ARA) refining and
storage hub STK-GO-ARA dropped 10.4% to 2.3 million tonnes in the week to Jan. 23, data from
Dutch consultancy Insights Global showed.
    - ARA jet fuel inventories STK-JET-ARA fell 11.8% to 525,000 tonnes, the data showed.
    - Compared with a year earlier, jet fuel stocks were 16.3% lower, while gasoil inventories
were up 3.5%.
    - No gasoil trades, one jet fuel deal.
    - For more information, click
    - Oil prices were steady on Friday, but on track for a fall of up to 5% for the week on
growing concern that fuel demand will weaken as the spread of a respiratory virus from China
that has killed 25 so far dents travel and darkens the economic outlook.
    - The United States on Thursday said it blacklisted two companies based in Hong Kong, one in
Shanghai and one in Dubai for helping Iran's state-owned National Iranian Oil Company (NIOC)
export millions of dollars of goods in violation of U.S. sanctions.
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               71.52     0.03       0.04       71.49  GO-SIN
 GO 0.5 Diff                     -1.98    -0.01       0.51       -1.97  GO-SIN-DIF
 Spot Gas Oil 0.25%              72.23     0.03       0.04       72.20  GO25-SIN
 GO 0.25 Diff                    -1.27    -0.01       0.79       -1.26  GO25-SIN-DIF
 Spot Gas Oil 0.05%              73.37     0.03       0.04       73.34  GO005-SIN
 GO 0.05 Diff                    -0.13    -0.01       8.33       -0.12  GO005-SIN-DIF
 Spot Gas Oil 0.001%             73.71     0.03       0.04       73.68  GO10-SIN
 GO 0.001 Diff                    0.21    -0.01      -4.55        0.22  GO10-SIN-DIF
 Spot Jet/Kero                   73.00     0.27       0.37       72.73  JET-SIN
 Jet/Kero Diff                    0.40    -0.05     -11.11        0.45  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 Subhranshu Sahu)
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