April 23, 2020 / 11:49 AM / a month ago

Asia Distillates-Jet fuel buyers get biggest cash discounts since 2005

    SINGAPORE, April 23 (Reuters) - Asia's cash differentials for jet fuel plunged on Thursday
to their widest discounts since 2005, while prices for the aviation fuel lingered within close
sight of their lowest level in over two decades, as coronavirus-led restrictions continued to
hammer the global airline industry.
    Cash discounts for jet fuel JET-SIN-DIF widened to $4.52 a barrel to Singapore quotes on
Thursday, the biggest cash discounts since November 2005. They were at a discount of $3.66 per
barrel on Wednesday.
    Jet fuel prices in Singapore JET-SIN were at $18.03 a barrel on Thursday, as against 
$14.68 per barrel on Wednesday that was the lowest since 1999.
    Most flights, especially the ones on international routes, remain grounded amid lockdowns
and travel restrictions across regions aimed to curb the virus pandemic.
    International air passenger traffic could drop by as many as 1.2 billion travellers, or
two-thirds, by September 2020, as the coronavirus pandemic weighs on demand, the United Nations
aviation agency said on Wednesday in a statement, citing projections.
    The International Civil Aviation Organization (ICAO) estimates that international capacity
could drop by as much as two-thirds from previous forecasts for the first three quarters of
2020.
    Refining profit margins or cracks for jet fuel were at $1.26 per barrel below
Dubai crude on Thursday, compared with minus $1.24 per barrel on Wednesday.
    Meanwhile, cracks for gasoil with 10ppm sulphur content slipped to $6.09 per
barrel over Dubai crude during Asian trade on Wednesday, down from $6.56 per barrel on
Wednesday.
    Cash differentials for 10 ppm gasoil GO10-SIN-DIF were at a discount of $2.40 per barrel
to Singapore quotes on Wednesday, compared with a discount of $2.72 a barrel in the previous
session.
    
    CHINA FUEL EXPORTS
    - China's diesel exports climbed to 2.83 million tonnes in March, up from 2.71 million
tonnes in the same period last year, data from the General Administration of Customs showed on
Thursday. The exports were 3.47 million tonnes combined for the first two months of the year.

    - The easing of some coronavirus curbs on travel and business activities in China helped
bolster fuel consumption in some parts of the country, starting in late February, but growing
macro-economic headwinds and fears of a second wave of virus outbreaks have weighed on demand
recovery of transport fuels.
    - China's jet kerosene exports in March plunged 15.3% from a year earlier to 1.48 million
tonnes, customs data showed. The exports were 2.93 million tonnes combined for January and
February.
    
    SINGAPORE INVENTORIES
    - Singapore onshore middle distillate stocks dropped 3.3% to 14.4 million barrels in the
week ended April 22, Enterprise Singapore data showed.
    - The inventories had surged to their highest level in more than three years last week.
    - Weekly middle distillate inventories have averaged 11.9 million barrels so far in 2020,
compared with 11.1 million barrels in 2019, Reuters calculations showed.
    - Overall, onshore middle distillate inventories were 54.6% higher year-on-year.
    
    EIA INVENTORIES
    - Stockpiles of crude, along with gasoline and distillate fuels rose sharply last week as
more oil heads into storage due to weak demand induced by the coronavirus pandemic, the Energy
Information Administration said on Wednesday.
    - Crude inventories rose by 15 million barrels in the week to April 17 to 518.6 million
barrels, putting them within striking distance of an all-time record of 535 million barrels set
in 2017.
    - Distillate stockpiles, which include diesel and heating oil, rose by 7.9
million barrels in the week to 136.9 million barrels, versus expectations for a 2.8
million-barrel rise, the EIA data showed.
    
    SINGAPORE CASH DEALS
    - No jet fuel trades, no gasoil deals
    - For more information, click
    
    OTHER NEWS
    - Asia's naphtha profit margin staged a dramatic comeback, spiking by a record 7,030% in a
single session to return to the positive zone this week, as a plunge in oil prices and renewed
petrochemicals demand from China boosted its value.
    - Saudi Arabia is exploring re-routing millions of barrels of oil onboard tankers sailing to
the United States if President Donald Trump decides to block imports of crude from the kingdom,
shipping and trade sources say.
    - The oil price collapse that took U.S. crude prices sub-zero for the first time in history
may turn out to be a silver lining for the world economy, possibly offering a springboard for
recovery when coronavirus-led lockdowns finally end.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                           
 CASH ($/T)                ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                   24.20     3.96      19.57       20.24  GO-SIN
 GO 0.5 Diff                         -5.67     0.25      -4.22       -5.92  GO-SIN-DIF
 Spot Gas Oil 0.25%                  24.27     3.96      19.50       20.31  GO25-SIN
 GO 0.25 Diff                        -5.60     0.25      -4.27       -5.85  GO25-SIN-DIF
 Spot Gas Oil 0.05%                  24.84     3.78      17.95       21.06  GO005-SIN
 GO 0.05 Diff                        -5.03     0.06      -1.18       -5.09  GO005-SIN-DIF
 Spot Gas Oil 0.001%                 27.47     4.03      17.19       23.44  GO10-SIN
 GO 0.001 Diff                       -2.40     0.32     -11.76       -2.72  GO10-SIN-DIF
 Spot Jet/Kero                       18.03     3.35      22.82       14.68  JET-SIN
 Jet/Kero Diff                       -4.52    -0.86      23.50       -3.66  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 Amy Caren Daniel)
  
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