May 5, 2020 / 11:55 AM / a month ago

Asia Distillates-Jet fuel refining margins skid to record low

    SINGAPORE, May 5 (Reuters) - Asian refining margins for jet fuel plunged to a record low on
Tuesday, partly hurt by firmer raw material crude prices, while traders feared aviation demand
would remain under pressure even after coronavirus containment measures are eased and border
restrictions are lifted.
    Refining margins or cracks for jet fuel dropped to $7.23 a barrel below Dubai
crude during Asian trading hours, Refinitiv Eikon data showed. They were at a discount of $3.16
per barrel to Dubai crude on Monday.
     Crude oil prices jumped again on Tuesday on hopes for a recovery in vehicle traffic and
fuel demand as some European and Asian countries along with several U.S. states began to ease
coronavirus lockdown measures.
    "I think the jet fuel market will not recover this year. Probably, for it to recover the
quickest would be in 2021," a Singapore-based jet fuel trader said.
    As airlines suffer massive losses from grounded flights due to virus-led restrictions,
passenger demand could take a further hit from carriers passing on their costs to flyers by
hiking ticket prices, trade sources said.
    Cash discounts for jet fuel JET-SIN-DIF were at $4.29 a barrel to Singapore quotes on
Tuesday, compared with $4.65 per barrel on Monday.
    The May/June time spread for the aviation fuel in Singapore traded at a
discount of $3.75 per barrel on Tuesday, Refinitiv Eikon data showed.
    Cash discounts for 10 ppm gasoil GO10-SIN-DIF were at $1.46 per barrel to Singapore quotes
on Tuesday, compared with a discount of $1.58 per barrel a day earlier.
     Cracks for the benchmark gasoil grade with 10 ppm sulphur content in Singapore
 slid to $1.77 a barrel over Dubai crude on Tuesday, the lowest on record in
Refinitiv Eikon data that goes back to January 2014. They were at $4.56 per barrel a day
    - No jet fuel trades, no gasoil deals
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    - Oil and gas output from some of the world's top oil companies is set to drop by nearly 11%
in the second quarter of 2020 to levels not seen in at least 17 years, according to Reuters
    - Pilipinas Shell Petroleum Corp said on Tuesday it will shut down its
110,000-barrel-per-day Tabangao refinery in the Philippines for one month from mid-May as the
coronavirus pandemic has hammered oil demand.
 CASH ($/T)              ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                 26.34     0.23       0.88       26.11  GO-SIN
 GO 0.5 Diff                       -4.57     0.09      -1.93       -4.66  GO-SIN-DIF
 Spot Gas Oil 0.25%                26.83     0.23       0.86       26.60  GO25-SIN
 GO 0.25 Diff                      -4.08     0.09      -2.16       -4.17  GO25-SIN-DIF
 Spot Gas Oil 0.05%                26.93     0.23       0.86       26.70  GO005-SIN
 GO 0.05 Diff                      -3.98     0.09      -2.21       -4.07  GO005-SIN-DIF
 Spot Gas Oil 0.001%               29.45     0.26       0.89       29.19  GO10-SIN
 GO 0.001 Diff                     -1.46     0.12      -7.59       -1.58  GO10-SIN-DIF
 Spot Jet/Kero                     15.86    -0.72      -4.34       16.58  JET-SIN
 Jet/Kero Diff                     -4.29     0.36      -7.74       -4.65  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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