March 17, 2020 / 11:13 AM / 24 days ago

Asia Distillates-Jet fuel refining margins dive to over 11-year low amid coronavirus crisis

    SINGAPORE, March 17 (Reuters) - Asian refining margins for jet fuel weakened further on
Tuesday, sinking to a fresh low in more than 11 years, as the coronavirus continued to baffle
the global aviation sector with airlines around the world being forced to ground more flights
and offer refunds for travellers.
    Refining margins or cracks for jet fuel slumped on Tuesday to $3.82 per barrel
over Dubai crude during Asian trade, the lowest on record as per Refinitiv Eikon data that goes
back as far as March 2009. They were at $4.71 per barrel a day earlier.    
    The jet fuel margins have plunged this week after more countries globally imposed further
travel restrictions as part of measures to slow down spread of the coronavirus.
    Airlines and airports are facing a huge shock as they battle a cash crunch resulting from
the coronavirus.
    The virus, which originated in China, has so far caused more than 7,160 deaths across 163
countries and territories, according to a Reuters tally based on official statements. 
    China now accounts for less than half of those deaths, while the World Health Organization
said Europe has now become the epicentre of the coronavirus pandemic.
    "The latest restrictions on air travel in and around Europe mean we now see European jet
fuel demand declining by at least 70% (1 million barrels per day) year-on-year over
March-April," Vienna-based consultancy JBC Energy said on Tuesday.
    "As we are getting closer to travelling season, and with uncertainty mounting, we see an
increasing likelihood that this year's summer in the Northern Hemisphere may see prolonged
disappointments for jet fuel demand."
    If the coronavirus crisis lasts another two or three months, it could force carriers to
collapse and spark more consolidation in the beleaguered airline industry, the International Air
Transport Association (IATA) chief Alexandre de Juniac told Reuters on Friday.
    Cash discounts for jet fuel JET-SIN-DIF were at 28 cents per barrel to Singapore quotes on
Tuesday, compared with a discount of 35 cents per barrel on Monday.
    Meanwhile, cash differentials for 10 ppm gasoil GO10-SIN-DIF were at a narrow premium of 2
cents per barrel to Singapore quotes on Tuesday, compared with a discount of 1 cent in the
previous session.
    Refining margins for gasoil with 10 ppm sulphur content dropped to $8.78 per
barrel over Dubai crude on Tuesday, the lowest since Feb. 27. They were at $8.84 per barrel on
    Cracks for the benchmark gasoil grade in Singapore have shed nearly 30% over the last two
months, Refinitiv data showed.
    - Japan's ANA said it would cancel or reduce additional 2,630 international flights serving
58 routes from March 29-April 24, for total 4,854 flights.
    - Delta Air Lines said Los Angeles to Sydney flights have been suspended due to Australia
government restriction
    - Delta said flights to Aruba, Guatemala, Honduras, Panama, Peru suspended after foreign
government restrictions
    - Bahrain's state-owned carrier Gulf Air has announced it was temporarily suspending nearly
75% of destinations it operates to as the coronavirus outbreak batters demand for global air
    - One gasoil trade, one jet fuel deal
    - For more information, click
    - Rates to store oil at one of the world's biggest trading hubs are surging, as traders
globally scramble to secure space in tanks to cope with slumping demand from the coronavirus
outbreak and a flood of supply from the Saudi-Russia price war.
    - Oil prices fell below $30 per barrel on Tuesday, extending losses after shedding a tenth
of their value on Monday, as the coronavirus pandemic hit demand while Saudi Arabia raised
output to a record as it battles with Russia for market share.
 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close   RIC
 Spot Gas Oil 0.5%                39.14    -0.12      -0.31        39.26  GO-SIN
 GO 0.5 Diff                      -1.95    -0.01       0.52        -1.94  GO-SIN-DIF
 Spot Gas Oil 0.25%               39.38    -0.12      -0.30        39.50  GO25-SIN
 GO 0.25 Diff                     -1.71    -0.01       0.59        -1.70  GO25-SIN-DIF
 Spot Gas Oil 0.05%               40.07    -0.12      -0.30        40.19  GO005-SIN
 GO 0.05 Diff                     -1.02    -0.01       0.99        -1.01  GO005-SIN-DIF
 Spot Gas Oil 0.001%              41.12    -0.07      -0.17        41.19  GO10-SIN
 GO 0.001 Diff                     0.02     0.03    -300.00        -0.01  GO10-SIN-DIF
 Spot Jet/Kero                    35.75    -0.85      -2.32        36.60  JET-SIN
 Jet/Kero Diff                    -0.28     0.07     -20.00        -0.35  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 Sherry Jacob-Phillips)
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