March 25, 2020 / 10:59 AM / 11 days ago

Asia Distillates-Jet fuel at biggest spot discounts since Nov 2008

    SINGAPORE, March 25 (Reuters) - Asia's cash differentials for jet fuel plunged further on
Wednesday to their biggest spot discounts in more than 11 years, hammered by stifled aviation
demand due to the coronavirus pandemic.
    Cash discounts for jet fuel JET-SIN-DIF were at $2.28 per barrel to Singapore quotes on
Wednesday, the widest since November 2008. They were at a discount of $1.71 per barrel in the
previous session.
    Refining profit margins for jet fuel rose for a second consecutive session to
$2.51 a barrel over Dubai crude during Asian trading hours on Wednesday, up from 62 cents per
barrel a day earlier.
    The Asian margins briskly turned negative for the first time in over a decade earlier this
week, while jet fuel prices in New York fell to the lowest on record as demand for the fuel is
anticipated to drop by as much as 70% in the second quarter.
    Most international flights remain grounded as countries across the world restrict travel to
stem the coronavirus pandemic, which has killed nearly 14,000 people and sickened more than
375,000 over the last few months.
    The aviation fuel market would likely remain under pressure at least until the third
quarter, assuming the spread of the virus is contained by then, trade sources and industry
analysts said.
    "The jet fuel market will not find support before June, but I'm hopeful for July," said
Sukrit Vijayakar, director of Indian energy consultancy Trifecta.
    "I see demand returning to more normal levels in the third quarter and second-half of the
year possibly even higher to make up for all the lost travel of the first half."
    Meanwhile, cash differentials for 10 ppm gasoil GO10-SIN-DIF widened their discounts to 31
cents per barrel to Singapore quotes on Wednesday, compared with a 23-cent discount in the
previous session.
    Refining margins, also known as cracks, for gasoil with 10 ppm sulphur content
climbed to $10.26 per barrel over Dubai crude on Wednesday, up from $10.12 per barrel on
    - Global airlines urged governments on Tuesday to speed up bailouts to rescue the air
transport industry as they doubled their estimate of 2020 revenue losses from the coronavirus
crisis to more than $250 billion.
    - The industry is now contemplating months without flying. Many will not survive such a
hammer blow to their finances. The International Air Transport Association (IATA) said without
government support, up to half of airlines face possible bankruptcy in the coming weeks.
    - Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 39.5% to 1.9
million barrels in the week to March 23, data via S&P Global Platts showed.
    - Stocks of middle distillates in the Fujairah oil hub have averaged 3.1 million barrels so
far in 2020, compared with a weekly average of 2.4 million barrels in 2019, Reuters calculations
    - The weekly Fujairah middle distillate stocks were about 14% lower than a year earlier.
    - U.S. crude oil inventories fell in the most recent week, along with gasoline and
distillate stocks, data from industry group American Petroleum Institute showed on Tuesday.

    - Distillate fuel inventories, which include diesel and heating oil, fell by 1.9 million
barrels, in line with estimates.
    - Vietnam's Nghi Son Refinery and Petrochemical (NSRP) is offering for a spot sale of 40,000
kilolitres, about 251,000 barrels, of gasoil with a sulphur content of 50 ppm for April 10-12
    - The tender closes on March 30.
    - For more such information, please click
    - No jet fuel trades, no gasoil deals
    - For more information, click
    - Some ports in India including those owned by Adani Ports & SEZ Ltd have declared force
majeure after Asia's third-biggest economy announced a 21-day lockdown to prevent the spread of
the coronavirus, documents seen by Reuters showed.
    - China's crude oil imports in the first two months of 2020 from top supplier Saudi Arabia
rose 26% from a year earlier, while purchases from No. 2 supplier Russia gained 11%, Reuters'
calculations based on customs data showed on Wednesday.

 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               37.90     0.22       0.58       37.68  GO-SIN
 GO 0.5 Diff                     -2.11    -0.08       3.94       -2.03  GO-SIN-DIF
 Spot Gas Oil 0.25%              38.14     0.22       0.58       37.92  GO25-SIN
 GO 0.25 Diff                    -1.87    -0.08       4.47       -1.79  GO25-SIN-DIF
 Spot Gas Oil 0.05%              38.83     0.22       0.57       38.61  GO005-SIN
 GO 0.05 Diff                    -1.18    -0.08       7.27       -1.10  GO005-SIN-DIF
 Spot Gas Oil 0.001%             39.70     0.22       0.56       39.48  GO10-SIN
 GO 0.001 Diff                   -0.31    -0.08      34.78       -0.23  GO10-SIN-DIF
 Spot Jet/Kero                   30.04     1.51       5.29       28.53  JET-SIN
 Jet/Kero Diff                   -2.28    -0.57      33.33       -1.71  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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