June 29, 2020 / 10:36 AM / 13 days ago

Asia Distillates-Jet cracks drop to 3-week low on muted demand

    SINGAPORE, June 29 (Reuters) - Asian refining margins for jet fuel slipped to their weakest
in three weeks on Monday, despite lower raw material crude prices, as a resurgence in
coronavirus cases in some countries dampened hopes for a recovery in aviation demand.
    Refining margins, also known as cracks, for jet fuel dropped to $1.29 a barrel
over Dubai crude during Asian trading hours, the lowest level since June 5. The cracks were at
$1.66 per barrel on Friday.
    The region's biggest aviation market China, which showed the first hopes of a demand
recovery, is now dealing with a new wave of coronavirus cases in its capital city, while major
tourism hub Vietnam said it has no plans to open up to international tourists yet over fears of
a second wave of infections.
    "For jet fuel demand, we expect a slow recovery in China, even though economic activity has
largely returned to normal," said Yuwei Pei, analyst at consultancy Wood Mackenzie.
    "The demand is estimated to see a persistent year-on-year decline throughout the year of
2020, and the recovery to pre-crisis levels will not occur until the beginning of 2021."
    The consultancy estimates jet fuel demand in China to reach 800,000 barrels per day in
January 2021, a 1.3% increase over January 2020 and a 1.7% increase over January 2019.
    Cash discounts for jet fuel JET-SIN-DIF remained unchanged at 79 cents a barrel to
Singapore quotes on Monday.
    - Indonesia's state oil and gas company PT Pertamina said on Saturday its average daily fuel
sales has risen to 114,000 kilolitres since June 8 amid gradual easing of coronavirus-related
restrictions on movement.
    That represents a 10% increase from average daily sales during a period when some Indonesian
cities imposed semi-lockdowns due to the outbreak, Pertamina said in a statement.
    - No jet fuel trades, no gasoil deals
    - Crude oil prices slid on Monday as sharp spikes in new coronavirus infections around the
world forced some countries to resume partial lockdowns, raising concerns about the pace of
economic recovery and fuel demand.

 CASH ($/T)             ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                44.99    -1.33      -2.87       46.32  GO-SIN
 GO 0.5 Diff                      -1.00     0.03      -2.91       -1.03  GO-SIN-DIF
 Spot Gas Oil 0.25%               45.63    -1.33      -2.83       46.96  GO25-SIN
 GO 0.25 Diff                     -0.36     0.03      -7.69       -0.39  GO25-SIN-DIF
 Spot Gas Oil 0.05%               46.52    -1.33      -2.78       47.85  GO005-SIN
 GO 0.05 Diff                      0.53     0.03       6.00        0.50  GO005-SIN-DIF
 Spot Gas Oil 0.001%              46.76    -1.33      -2.77       48.09  GO10-SIN
 GO 0.001 Diff                     0.77     0.03       4.05        0.74  GO10-SIN-DIF
 Spot Jet/Kero                    40.43    -1.36      -3.25       41.79  JET-SIN
 Jet/Kero Diff                    -0.79     0.00       0.00       -0.79  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 Maju Samuel)
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