February 12, 2020 / 10:51 AM / 5 days ago

Asia Distillates-Jet fuel cash premiums dip, prompt-month spread widens

    SINGAPORE, Feb 12 (Reuters) - Asian cash differentials for jet fuel inched down on
Wednesday, while the prompt-month spread widened its contango amid concerns that aviation demand
would remain lacklustre in the short term due to travel restrictions stemming from the
coronavirus outbreak.
    Cash differentials for jet fuel JET-SIN-DIF were at a premium of 2 cents a barrel to
Singapore quotes, compared with a premium of 3 cents per barrel a day earlier.
    The February/March time spread for the aviation fuel widened its contango to
trade at a discount of 15 cents per barrel, compared with a discount of 12 cents a barrel on
Tuesday, Refinitiv Eikon data showed.
    In a contango market structure, prompt prices are lower than those for future delivery. This
tends to encourage holders of physical barrels to store the product for selling later to secure
higher prices. 
    Refining margins, or cracks, for jet fuel rose 25 cents to $10.37 per barrel
over Dubai crude during Asian trading hours. 
    Earlier last week, the cracks hit their lowest level since April 2016 as global airlines
suspended flights to China due to the coronavirus epidemic, which had killed more than 1,100
people by the end of Tuesday.
    China's aviation regulator said it will support restructuring or mergers to help airlines
cope with the outbreak, noting that it has hurt the bottom lines of many carriers.
    The Civil Aviation Administration of China said it hopes countries will lift virus-related
travel restrictions as soon as possible, in line with the guidance from the World Health
Organization and the International Civil Aviation Organization.
    Meanwhile, refining margins for gasoil with 10 ppm sulphur content rose to
$12.47 per barrel over Dubai crude, up from $12.42 per barrel on Tuesday.
    Cash premiums for 10 ppm gasoil GO10-SIN-DIF slipped 1 cent from a day earlier to 72 cents
per barrel to Singapore quotes.
    
    VLSFO MARKET DROPS FROM RECORD HIGHS
    - Asia's market for very low-sulphur fuel oil (VLSFO) has retreated from its record high
near the start of the year, as demand crumbles under seasonal factors and an epidemic in China,
while supply expectations improve, analysts and traders said.
    - Cooling VLSFO prices are also an early sign of stabilizing market fundamentals after
months of volatility sparked by adoption of new global marine fuel rules in one of the biggest
shake-ups in decades for the shipping and oil industries.
    - Five trade sources said the spread of coronavirus in China had exacerbated a slowdown in
demand for marine fuels, also known as bunkers, that is typical of the period around the Lunar
New Year holiday, extended this year to fight the disease.
    
    FUJAIRAH STOCKS
    - Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 27.3% from a week
earlier to 2.9 million barrels in the week to Feb. 10, data via S&P Global Platts showed.

    - Stocks of middle distillates in the Fujairah oil hub have averaged 3.7 million barrels so
far in 2020, compared with a weekly average of 2.4 million barrels in 2019, Reuters calculations
showed.
    - The weekly Fujairah middle distillate stocks were 25% higher than a year earlier.
    
    API INVENTORY DATA
    - U.S. crude oil stocks rose in the most recent week, while gasoline inventories increased
and distillate stocks fell, data from industry group the American Petroleum Institute showed on
Tuesday.
    - Crude inventories rose by 6 million barrels in the week to Feb. 7 to 438.9 million
barrels, compared with analysts' expectations for a build of 3 million barrels.
    - Distillate fuel inventories, which include diesel and heating oil, fell by 2.3 million
barrels, compared with expectations for a 557,000-barrel draw, the data showed.
    
    SINGAPORE CASH DEALS
    - Four gasoil trades, no jet fuel deals
    - For more information, click
    
    OTHER NEWS
    - Oil prices extended gains as China reported its lowest daily number of new coronavirus
cases since late January, stoking investor hopes that fuel demand in the world's second-largest
oil consumer may begin to recover from the epidemic.
    - The oil market this week took a turn that could prompt traders to consider storing oil
offshore as a growing crude surplus threatens to worsen.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                         
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                65.13     1.27       1.99       63.86  GO-SIN
 GO 0.5 Diff                      -1.73     0.00       0.00       -1.73  GO-SIN-DIF
 Spot Gas Oil 0.25%               65.71     1.27       1.97       64.44  GO25-SIN
 GO 0.25 Diff                     -1.15     0.00       0.00       -1.15  GO25-SIN-DIF
 Spot Gas Oil 0.05%               66.14     1.15       1.77       64.99  GO005-SIN
 GO 0.05 Diff                     -0.72    -0.12      20.00       -0.60  GO005-SIN-DIF
 Spot Gas Oil 0.001%              67.58     1.26       1.90       66.32  GO10-SIN
 GO 0.001 Diff                     0.72    -0.01      -1.37        0.73  GO10-SIN-DIF
 Spot Jet/Kero                    64.46     1.48       2.35       62.98  JET-SIN
 Jet/Kero Diff                     0.02    -0.01     -33.33        0.03  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)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below