June 10, 2020 / 10:46 AM / a month ago

Asia Distillates-Jet fuel cracks rise to highest level in more than two months

    SINGAPORE, June 10 (Reuters) - Asian refining margins for jet fuel rose to their highest in
more than two months on Wednesday, partly buoyed by weaker crude prices, while a gradual uptick
in regional flights is helping aviation demand to recover.
    Refining margins, also known as cracks, for jet fuel climbed to $3.25 per
barrel over Dubai crude during Asian trading hours, a level not seen since March 30.
    Jet fuel margins have recovered from lows in early-May as countries re-open domestic flight
routes, but the global aviation market is expected to take years to return to pre-crisis levels.
    China's air passenger traffic halved in May compared with a year earlier, although the pace
of decline slowed from the previous month, showing the industry is on track for a gradual
recovery.
    Air passengers numbered 25.83 million in May, down 52.6% year-on-year, China's aviation
regulator said on Wednesday. This compares with a 68.5% year-on-year decline in April.
    The jet fuel market would likely get a boost in coming weeks as some governments are
relaxing coronavirus-related curbs on international flights, trade sources said.
    Cash discounts for jet fuel JET-SIN-DIF widened by 16 cents to 41 cents a barrel to
Singapore quotes on Wednesday, hurt by a weaker deal in the physical market.
    
    INVENTORIES
    - Middle-distillate inventories in the Fujairah Oil Industry Zone declined 16.4% to 5
million barrels in the week to June 8, data via S&P Global Platts showed.
    - The weekly stocks in Fujairah 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.
    - Meanwhile, U.S. distillate fuel inventories rose by 4.3 million barrels, compared with
expectations for an increase of 3 million barrels, data from industry group the American
Petroleum Institute (API) showed on Tuesday.
    
    SINGAPORE CASH DEALS
    - One jet fuel trade, no gasoil deal
    
    OTHER NEWS
    - Oil fell more than 2% towards $40 a barrel on Wednesday after a report showed a rise in
crude inventories in the United States, reviving concerns about oversupply and weak demand due
to the coronavirus crisis.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                           
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close   RIC
 Spot Gas Oil 0.5%                44.88     1.54       3.55        43.34  GO-SIN
 GO 0.5 Diff                      -1.95     0.23     -10.55        -2.18  GO-SIN-DIF
 Spot Gas Oil 0.25%               45.78     1.54       3.48        44.24  GO25-SIN
 GO 0.25 Diff                     -1.05     0.23     -17.97        -1.28  GO25-SIN-DIF
 Spot Gas Oil 0.05%               46.71     1.54       3.41        45.17  GO005-SIN
 GO 0.05 Diff                     -0.12     0.23     -65.71        -0.35  GO005-SIN-DIF
 Spot Gas Oil 0.001%              47.31     1.49       3.25        45.82  GO10-SIN
 GO 0.001 Diff                     0.48     0.18      60.00         0.30  GO10-SIN-DIF
 Spot Jet/Kero                    42.53     0.64       1.53        41.89  JET-SIN
 Jet/Kero Diff                    -0.41    -0.16      64.00        -0.25  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 Alexander Smith)
  
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