February 25, 2020 / 12:42 PM / a month ago

Asia Distillates-Jet fuel cracks hit fresh low in over a decade

    SINGAPORE, Feb 25 (Reuters) - Asian refining margins for jet fuel hit fresh lows in more
than a decade on Tuesday, as regional aviation demand continues to be hammered by the
coronavirus epidemic as it spreads beyond China.
    Refining profit margins or cracks for jet fuel dipped to $7.92 per barrel over
Dubai crude during Asian trade on Tuesday, a level not seen since late 2009, Refinitiv Eikon
data showed. The cracks were at $8.54 per barrel on Monday.
    Refining profit for the aviation fuel in Singapore have shed nearly 18% this month, after
having posted their biggest monthly decline in a more than a decade in January, as the virus
epidemic prompted global airlines to suspend a string of flights.
    China's aviation regulator said flights in the country that were suspended in the wake of
the outbreak will resume gradually as factories and businesses reopen but those to Hubei
province, the virus's epicentre, will remain halted.
    About 80% of scheduled airline capacity to, from and within China was cut last week, with
Chinese airlines taking the biggest hit.
    Cash premiums for jet fuel JET-SIN-DIF climbed 16 cents to 21 cents per barrel to
Singapore quotes on Tuesday, helped by a couple of firmer deals in the physical market. 
    Meanwhile, cash premiums for 10 ppm gasoil GO10-SIN-DIF dipped to 28 cents per barrel to
Singapore quotes on Tuesday, compared with a premium of 38 cents on Monday.
    Cracks for gasoil with 10 ppm sulphur content were at $10 per barrel over
Dubai crude on Tuesday, the lowest since June 2017. The gasoil cracks were at $10.66 per barrel
on Monday.
    - China has ramped up fuel exports to compensate for losses to domestic demand as it
grapples with the coronavirus outbreak, having not been able to prevent a surplus in the world's
second-largest oil consumer with cutbacks in its refining output.
    - China's refined oil product exports have surged to well above year-ago levels, according
to trade sources and industry analysts, adding to supplies in the rest of Asia, which is also
dealing with lacklustre demand due to the coronavirus epidemic.
    - China's refined oil product demand is expected to fall 35.7% in the first quarter,
compared with a year earlier, leading to a surplus of 27.08 million tonnes in the local market,
said the research institute for China National Petroleum Corp (CNPC). 

    - Two jet fuel deals, three gasoil trades
    - For more information, click
    - Banks are suspending the credit lines for some Chinese independent oil refineries amid
rising concerns about overall industrial defaults and as the coronavirus outbreak has eaten into
the processors' fuel sales.
    At least three independent refiners have had $600 million in credit lines suspended by
international banks, said three refinery and trading executives and two finance directors at the
affected companies, requesting anonymity because of the sensitivity of the matter.
    - Oil climbed on Tuesday as investors sought bargains after crude benchmarks slumped almost
4% in the previous session, although concerns about the coronavirus spreading out of China and
curbing major economies and fuel demand capped gains.
 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                 62.67    -0.73      -1.15       63.40  GO-SIN
 GO 0.5 Diff                       -1.93    -0.07       3.76       -1.86  GO-SIN-DIF
 Spot Gas Oil 0.25%                63.03    -0.73      -1.14       63.76  GO25-SIN
 GO 0.25 Diff                      -1.57    -0.07       4.67       -1.50  GO25-SIN-DIF
 Spot Gas Oil 0.05%                63.63    -0.60      -0.93       64.23  GO005-SIN
 GO 0.05 Diff                      -0.97     0.06      -5.83       -1.03  GO005-SIN-DIF
 Spot Gas Oil 0.001%               64.89    -0.76      -1.16       65.65  GO10-SIN
 GO 0.001 Diff                      0.28    -0.10     -26.32        0.38  GO10-SIN-DIF
 Spot Jet/Kero                     62.76    -0.46      -0.73       63.22  JET-SIN
 Jet/Kero Diff                      0.21     0.16     320.00        0.05  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 Anil D'Silva)
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