March 3, 2020 / 11:09 AM / a month ago

Asia Distillates-Jet fuel cash discounts widen, cracks drop

    SINGAPORE, March 3 (Reuters) - Asia's cash discounts for jet fuel widened on Tuesday, hurt
by persistent weakness in buying interest for physical cargoes.
    Cash differentials for jet fuel JET-SIN-DIF were at a discount of 19 cents per barrel to
Singapore quotes on Tuesday, compared with a discount of 2 cents per barrel on Monday.
    Refining margins or cracks for jet fuel dropped to $6.78 per barrel over Dubai
crude during Asian trade on Tuesday, down from $7.55 per barrel a day earlier.
    The already-battered jet fuel refining profits may come under further pressure in coming
months as global airlines suspend more flights and more passengers cancel travel plans due to
the widening spread of the coronavirus.
    The Asian jet fuel market has suffered unprecedented losses this year due to the virus,
which has caused dozens of airlines to suspend scores of flights, affecting the travel plans of
millions of people.
    The resulting drop in fuel demand had knocked Singapore jet fuel prices more than 30% lower
by the end of February from the start of 2020, and caused Singapore cracks to collapse by over
50% in the first two month of this year, Refinitiv Eikon data showed.
    Meanwhile, refining margins for gasoil with 10 ppm sulphur content weakened to
$8.96 per barrel over Dubai crude on Tuesday, compared with $9.61 per barrel on Monday.
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF were at 24 cents per barrel to Singapore
quotes on Monday, down from 31 cents per barrel in the previous session. 
    - Profit margins in China's crude oil refining sector plunged 42% in 2019 from a year
earlier, the steepest fall in 5 years, an industry body said on Tuesday, warning that
overcapacity is a growing problem.
    - Some small- and medium-sized refineries were also likely face financial pressure from a
fall in sales and a rise in inventory amid the coronavirus outbreak, the China Petroleum and
Chemical Industry Federation (CPCIF) said, but the impact would be mainly felt in the first
    - No gasoil trades, no jet fuel deals
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    - Oil prices extended gains on Tuesday on expectations that central banks are likely to
enact financial stimulus to offset the impacts of the coronavirus outbreak and growing optimism
that OPEC will order deeper output cuts this week.
    - OPEC ministers are beginning to arrive to Vienna on Tuesday as the group debates whether
to further reduce oil production to tackle deteriorating demand from the global spread of the
new coronavirus.
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                59.10     0.62       1.06       58.48  GO-SIN
 GO 0.5 Diff                      -1.92    -0.02       1.05       -1.90  GO-SIN-DIF
 Spot Gas Oil 0.25%               59.37     0.62       1.06       58.75  GO25-SIN
 GO 0.25 Diff                     -1.65    -0.02       1.23       -1.63  GO25-SIN-DIF
 Spot Gas Oil 0.05%               60.06     0.62       1.04       59.44  GO005-SIN
 GO 0.05 Diff                     -0.96    -0.02       2.13       -0.94  GO005-SIN-DIF
 Spot Gas Oil 0.001%              61.26     0.57       0.94       60.69  GO10-SIN
 GO 0.001 Diff                     0.24    -0.07     -22.58        0.31  GO10-SIN-DIF
 Spot Jet/Kero                    58.27     0.27       0.47       58.00  JET-SIN
 Jet/Kero Diff                    -0.19    -0.17     850.00       -0.02  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 Ramakrishnan M.)
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