June 26, 2020 / 11:18 AM / 15 days ago

Asia Distillates-Jet cracks tumble amid persistent demand weakness

    SINGAPORE, June 26 (Reuters) - Asian refining margins for jet fuel dropped on Friday as the
possibility of a renewed coronavirus wave dampened recovery hopes for the aviation fuel, with
countries planning not to widely open up to international travellers to avoid imported cases.
    Refining margins, also known as cracks, for jet fuel slid by 91 cents to $1.66
a barrel over Dubai crude during Asian trade on Friday, the weakest since June 8.
    The jet cracks have fallen nearly 41% this week, the first weekly decline in four, Refinitiv
Eikon data showed.
    The July/August time spread for the aviation fuel in Singapore widened its
contango on Friday to trade at a discount of 70 cents per barrel.
    The jet fuel market is expected to remain weaker in the second half of 2020 compared with
the year-ago period even if some pockets of demand emerge over the next two quarters, industry
analysts said.
    The regrade, which is the price spread between jet and gasoil, for July stood at minus $4.38
a barrel on Friday, as against minus $3.85 on Thursday.
    Cash discounts for jet fuel JET-SIN-DIF were at 79 cents a barrel to Singapore quotes,
compared with a 76-cent discount in the previous session.
    Meanwhile, cash differentials for 10 ppm gasoil GO10-SIN-DIF were at a premium of 74 cents
a barrel to Singapore quotes on Friday, up from Thursday's 72 cents per barrel.
    - Vietnam plans to cut environment tax on jet fuel by 30% to help local airlines weather the
impact of the coronavirus pandemic, the Ministry of Finance said on Friday.
    - The ministry is seeking government approval to cut the jet fuel tax from 3,000 dong
($0.13) per litre to 2,100 dong.
    - Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and
storage hub STK-GO-ARA fell 4.2% to 2.8 million tonnes in the week to June 25, data from Dutch
consultancy Insights Global showed.
    - ARA jet fuel inventories STK-JET-ARA rose 4.7% to 920,000 tonnes, the data showed.
    - Compared with a year earlier, jet fuel stocks were 11.2% higher, while gasoil inventories
were up 0.2%.
    - No jet fuel trades, no gasoil deals
    - Fuel demand is gradually recovering as coronavirus lockdown measures ease around the globe
but a second wave of infections could swiftly undermine the trend, industry data showed.

 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               46.32     0.99       2.18       45.33  GO-SIN
 GO 0.5 Diff                     -1.03     0.02      -1.90       -1.05  GO-SIN-DIF
 Spot Gas Oil 0.25%              46.96     0.99       2.15       45.97  GO25-SIN
 GO 0.25 Diff                    -0.39     0.02      -4.88       -0.41  GO25-SIN-DIF
 Spot Gas Oil 0.05%              47.85     0.99       2.11       46.86  GO005-SIN
 GO 0.05 Diff                     0.50     0.02       4.17        0.48  GO005-SIN-DIF
 Spot Gas Oil 0.001%             48.09     0.99       2.10       47.10  GO10-SIN
 GO 0.001 Diff                    0.74     0.02       2.78        0.72  GO10-SIN-DIF
 Spot Jet/Kero                   41.79     0.46       1.11       41.33  JET-SIN
 Jet/Kero Diff                   -0.79    -0.03       3.95       -0.76  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 Aditya Soni)
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