November 19, 2019 / 10:41 AM / 18 days ago

Asia Distillates-Gasoil cracks dip, jet fuel margins fall to lowest since July

    SINGAPORE, Nov 19 (Reuters) - Asian refining profit margins for 10 ppm gasoil plunged on
Tuesday, battered by abundant supplies, while jet fuel margins have slumped to their lowest
levels in more than four months due to lacklustre demand from the aviation sector.
    Refining margins, also known as cracks, for 10 ppm gasoil dropped to $14.37
per barrel over Dubai crude during Asian trade, the lowest since last Wednesday. They were at
$15.46 per barrel on Monday.
    Cracks for the benchmark gasoil grade in Singapore, which have shed about 17% in the last
one month, are currently about 7% lower than the seasonal average for this time of the year in
the last six years, Refinitiv Eikon data showed.
    Cash premiums for gasoil with 10 ppm sulphur content GO10-SIN-DIF fell six cents to 28
cents per barrel to Singapore quotes on Tuesday.
    The gasoil market, however, is expected to get a boost in coming weeks as the shipping
industry switches to cleaner marine fuels next year, and a considerable part of demand for
compliant fuel would likely move into the middle distillates pool, industry sources said.
    The International Maritime Organization (IMO) requires shippers to reduce the sulphur
content in bunker fuels used in their vessels to 0.5% from January, down from the current 3.5%.
    Refining margins for jet fuel fell to $14.27 per barrel over Dubai crude on
Tuesday, levels not seen since July 9. The jet fuel cracks were at $15.34 per barrel on Monday.
    The jet fuel market in Asia has taken a hit in recent months with weakening air cargo demand
on the back of U.S.-China trade tensions, while air passenger demand growth has also been modest
due to slowing global economy, according to data from International Air Transport Association.

    Meanwhile, Hong Kong has sunk into recession for the first time in a decade in the third
quarter weighed down by increasingly violent anti-government protests, which have led to a large
number of flight cancellations.
    "The ongoing tensions in Hong Kong is surely having an impact on the regional jet fuel
market as demand is affected in terms of both passengers and air cargo traffic," a
Singapore-based trader said on Tuesday.
     Cash differentials for jet fuel JET-SIN-DIF were at a discount of 63 cents per barrel to
Singapore quotes on Tuesday, compared with a 60-cent discount on Monday.
    
    ASIAN AIRLINES SLASH FLIGHTS TO HONG KONG
    - Several Asian airlines have cut flights to Hong Kong for the coming weeks, an industry
scheduling publication showed, as anti-government protests in the city grow increasingly violent
and disrupt daily life.
    - Routes Online said the latest schedules showed cancellations from PT Garuda Indonesia
(Persero) Tbk, India's SpiceJet Ltd, Malaysia's AirAsia Group Bhd,
South Korea's JejuAir Co Ltd and Jin Air Co Ltd and the Philippines' PAL
Holdings Inc and Cebu Air Inc.
    - On Sunday, Airport Authority Hong Kong reported declines in October of 13% in passengers
and 6.1% in the number of inbound and outbound flights - the steepest falls since the unrest
began.
    - On Monday, Routes Online showed Garuda has reduced weekly flights to Hong Kong to four
from 21 through mid-December, SpiceJet has suspended its Mumbai-Hong Kong route through Jan. 15
and AirAsia has cut flights from Kuala Lumpur and Kota Kinabalu in December and January.
    
    SINGAPORE CASH DEALS
    - One gasoil trade, no jet fuel deals.
    - Singapore trader Hin Leong sold 150,000 barrels of 10ppm gasoil to BP for Dec. 15-19
loading at a premium of 15 cents per barrel to December Singapore quotes.
    - For more information, please click
    
    OTHER NEWS
    - OPEC's share of India's oil imports fell to 73% in October, its lowest monthly share since
at least 2011, tanker data from sources showed, as refiners shipped in fuel from the United
States and other suppliers. 
    - India, which usually imports about 80% of its needs from members of the Organization of
the Petroleum Exporting Countries (OPEC), has been diversifying its sources of oil as local
refiners have upgraded plants to process cheaper crude grades.
    - U.S. crude oil output from seven major shale formations is expected to rise about 49,000
barrels per day in December to a record 9.13 million bpd, the U.S. Energy Information
Administration said in a monthly forecast on Monday.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                       
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               71.03    -2.01      -2.75       73.04  GO-SIN
 GO 0.5 Diff                     -3.48    -0.02       0.58       -3.46  GO-SIN-DIF
 Spot Gas Oil 0.25%              71.32    -1.88      -2.57       73.20  GO25-SIN
 GO 0.25 Diff                    -3.19     0.11      -3.33       -3.30  GO25-SIN-DIF
 Spot Gas Oil 0.05%              74.13    -2.01      -2.64       76.14  GO005-SIN
 GO 0.05 Diff                    -0.38    -0.02       5.56       -0.36  GO005-SIN-DIF
 Spot Gas Oil 0.001%             74.79    -2.05      -2.67       76.84  GO10-SIN
 GO 0.001 Diff                    0.28    -0.06     -17.65        0.34  GO10-SIN-DIF
 Spot Jet/Kero                   73.76    -1.99      -2.63       75.75  JET-SIN
 Jet/Kero Diff                   -0.63    -0.03       5.00       -0.60  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 Shailesh Kuber)
  
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