May 14, 2020 / 10:58 AM / 11 days ago

Asia Distillates-Jet cracks inch up, traders say no near-term relief in sight

    SINGAPORE, May 14 (Reuters) - Asian jet fuel cracks crawled up on Thursday, but traders were
concerned that aviation demand would not pick up in the near term as passengers shy away from
travelling due to the coronavirus quarantine measures even after border restrictions are eased.
    Refining margins or cracks for jet fuel in Singapore were at a discount of
$2.06 a barrel to Dubai crude during Asian trade on Thursday, compared with minus $3 per barrel
on Wednesday.
     Airline passenger traffic is not expected to return to pre-crisis levels until 2023 at the
earliest and may suffer even more if new health rules impose an excessive cost burden, the
International Air Transport Association (IATA) said.
    "In a recent survey that we did in 11 markets, 84% of travellers said that quarantine
measures was one of their top concerns, and 69% essentially said that they would not return to
travel under such conditions," IATA Chief Executive Alexandre de Juniac said in a statement on
Wednesday.
    Airlines and airports are recommending a layered approach to temporary safety measures as
air travel restarts, warning that no single measure can mitigate all of the risks during the
pandemic, according to a briefing document seen by Reuters.
    The plan laid out by the IATA and Airports Council International to reassure governments it
is safe for the public to fly includes contact tracing, temperature screening, social
distancing, extra cleaning and wearing masks.
    Cash discounts for jet fuel JET-SIN-DIF were at $1.99 a barrel to Singapore quotes on
Thursday, compared with a discount of $2.06 a barrel on Wednesday.
    Meanwhile, cash discounts for 10 ppm gasoil GO10-SIN-DIF narrowed by two cents to $1.33
per barrel to Singapore quotes on Thursday.
    Refining margins for gasoil with 10 ppm sulphur content slipped to $3.29 a
barrel over Dubai crude on Thursday, compared with $3.50 per barrel a day earlier.
    
    SINGAPORE INVENTORIES
    - Singapore onshore middle distillate stocks rose 1.2% to 14.2 million barrels in the week
ended May 13, Enterprise Singapore data showed.
    - Weekly middle distillate inventories have averaged at 12.2 million barrels so far in 2020,
compared with 11.1 million barrels in 2019, Reuters calculations showed.
    - Overall, onshore middle distillate inventories were 51.1% higher year-on-year.
    
    EIA INVENTORIES
    - U.S. crude oil stockpiles surprisingly fell last week, including at the Cushing, Oklahoma,
storage hub, the first time supply has dropped since the coronavirus pandemic choked off fuel
demand in the United States.
    - Crude inventories fell 745,000 barrels in the week to May 8 to 531.5 million barrels, the
U.S. Energy Information Administration said, compared with expectations in a Reuters poll for a
4.1 million-barrel rise. That was the first decline after 15 weeks of builds.
    - Distillate stockpiles, which include diesel and heating oil, rose by 3.5
million barrels in the week to 155 million barrels, versus expectations for a 2.9 million-barrel
rise, the EIA data showed.
    
    SINGAPORE CASH DEALS
    - No jet fuel trades, no gasoil deals
    - For more information, click
    
    OTHER NEWS
    - A slump in energy prices that has led to the deferral of liquefied natural gas (LNG)
projects around the world is set to be an unexpected boon for some producers trying to kickstart
new ventures in gas-rich western Australia.
    - Oil prices rose on Thursday after a drop in U.S. crude stocks and an IEA forecast for
lower global stockpiles in the second half, but the Brent benchmark still hovered around $30 a
barrel as a bleak demand picture curbed gains.
    
    ASSESSMENTS
 MID-DISTILLATES                                                                             
 CASH ($/T)               ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%                  29.71     1.35       4.76       28.36  GO-SIN
 GO 0.5 Diff                        -4.51     0.02      -0.44       -4.53  GO-SIN-DIF
 Spot Gas Oil 0.25%                 30.37     1.47       5.09       28.90  GO25-SIN
 GO 0.25 Diff                       -3.85     0.14      -3.51       -3.99  GO25-SIN-DIF
 Spot Gas Oil 0.05%                 30.43     1.37       4.71       29.06  GO005-SIN
 GO 0.05 Diff                       -3.79     0.04      -1.04       -3.83  GO005-SIN-DIF
 Spot Gas Oil 0.001%                32.89     1.35       4.28       31.54  GO10-SIN
 GO 0.001 Diff                      -1.33     0.02      -1.48       -1.35  GO10-SIN-DIF
 Spot Jet/Kero                      26.41     2.59      10.87       23.82  JET-SIN
 Jet/Kero Diff                      -1.99     0.07      -3.40       -2.06  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 Rashmi Aich)
  
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