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Oil report

Asia Distillates-Jet fuel cash discounts narrow, cracks slide

    SINGAPORE, Sept 23 (Reuters) - Asia's cash discounts for jet fuel narrowed marginally on
Wednesday as the front-month spread slimmed its contango, but refining margins for the fuel
dropped to their weakest in four sessions amid persistent weakness in aviation demand.
    Refining margins or cracks for jet fuel in Singapore were at a discount of 97
cents per barrel to Dubai crude during Asian trading hours, compared with minus 45 cents per
barrel on Tuesday.
    The jet cracks are expected to remain under pressure until winter heating demand for
kerosene picks up, market watchers said. Jet fuel and kerosene belong to the same grade of oil
products with jet margins determining the profitability of both.
    Several Asian airlines are resorting to sightseeing flights that take off and land at the
same airport to get travellers flying amid border restrictions, and generate some revenue as
they struggle to survive their worst downturn.
    But these flights will not be sufficient to help support the jet fuel market, which has been
hurt the most due to the coronavirus pandemic, trade sources said.
    "'Flights to nowhere' is a luxury demand. Between a 'flight to nowhere' versus 'staycation',
I would prefer the latter," a Singapore-based jet fuel trader said.
    Cash discounts for jet fuel JET-SIN-DIF were at $1.15 a barrel to Singapore quotes on
Wednesday, compared with $1.17 per barrel a day earlier.
    The October/November time spread for jet fuel traded at a discount of 67 cents
a barrel on Wednesday, Refinitiv Eikon data showed.
    
    INVENTORIES
    - Middle-distillate inventories in the Fujairah Oil Industry Zone rose 24.1% to 4.7 million
barrels in the week ended Sept. 21, data via S&P Global Platts showed.
    - The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared
with a weekly average of 2.4 million barrels in 2019, Reuters calculations showed.
    - Meanwhile, U.S. distillate fuel inventories fell by 2.1 million barrels, compared with
expectations for a draw of 648,000 barrels, data from industry group the American Petroleum
Institute (API) showed on Tuesday.
    
    SINGAPORE CASH DEALS
    - One gasoil deal, no jet fuel trades

    OTHER NEWS
    - Oil steadied on Wednesday, trading close to $42 a barrel, with a report that U.S. crude
inventories unexpectedly rose capping prices and as growing numbers of coronavirus cases around
the world raised concern of stalling demand.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               41.81    -0.38      -0.90       42.19  GO-SIN
 GO 0.5 Diff                     -2.00     0.01      -0.50       -2.01  GO-SIN-DIF
 Spot Gas Oil 0.25%              42.06    -0.38      -0.90       42.44  GO25-SIN
 GO 0.25 Diff                    -1.75     0.01      -0.57       -1.76  GO25-SIN-DIF
 Spot Gas Oil 0.05%              42.51    -0.39      -0.91       42.90  GO005-SIN
 GO 0.05 Diff                    -1.30     0.00       0.00       -1.30  GO005-SIN-DIF
 Spot Gas Oil 0.001%             43.22    -0.41      -0.94       43.63  GO10-SIN
 GO 0.001 Diff                   -0.59    -0.01       1.72       -0.58  GO10-SIN-DIF
 Spot Jet/Kero                   39.51    -0.40      -1.00       39.91  JET-SIN
 Jet/Kero Diff                   -1.15     0.02      -1.71       -1.17  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 Robert Birsel)
  
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