SINGAPORE, Jan 9 (Reuters) - Asia's cash differentials for jet fuel flipped to discounts from premiums on Thursday, hurt by lacklustre demand for physical cargoes and overall weakness in the region's aviation sector. Cash differentials for jet fuelwere at a discount of 11 cents per barrel to Singapore quotes, compared with a premium of 4 cents per barrel in the previous session. The aviation fuel market remained under pressure for a major part of last year due to slowing regional economic activity and U.S.-China trade war, which dampened air freight demand. Global air cargo demand fell in November 2019 compared to the year-ago period, recording the 13th straight month of year-on-year declines in freight volumes, the International Air Transport Association (IATA) said in statement on Wednesday. "Asia-Pacific airlines saw demand for air freight contract by 3.7% in November 2019, compared to the same period in 2018. This was the sharpest drop in freight demand of any region for the month," the IATA said. The January/February time spread for the aviation fuel in Singapore narrowed to trade at a premium of 5 cents a barrel on Thursday, from 14 cents in the day earlier. Refining margins or cracks for jet fuel inched up 1 cent to $13.55 per barrel over Dubai crude during Asian trade on Thursday. Meanwhile, cracks for gasoil with 10 ppm sulphur content rose for a second consecutive session to $14.95 per barrel over Dubai crude on Thursday, up from $14.54 per barrel on Wednesday. Cash premiums for 10 ppm gasoil were at 36 cents per barrel over Singapore quotes on Thursday, as against a 39-cent premium in the previous session. NOVEMBER AIR FREIGHT DATA - IATA - Global air freight demand dropped 1.1% in November, compared with the same period in 2018, the International Air Transport Association (IATA) said on Wednesday. - "While international e-commerce continues to grow, overall air cargo demand continued to face headwinds from the effects of the trade war between the U.S. and China, the deterioration in world trade, and a broad-based slowing in global economic growth," the IATA said in a statement. - Airlines in Latin America and the Middle East suffered sharp declines in year-on-year growth in total air freight volumes in November, while North America experienced a more moderate decline, according to the IATA. INDONESIA B40 BIODIESEL ROAD TESTS - Indonesia's energy ministry plans to start road tests for a biodiesel programme with 40% bio-content (B40) in April, a government official said on Thursday. - Indonesia, the world's largest palm oil producer, last year increased the mandatory bio-content of its biodiesel programme to 30%, known as B30, which is expected to cut the country's energy imports and increase consumption of palm oil - the feedstock to the fuel. SINGAPORE INVENTORIES - Singapore onshore middle distillate stocks fell 10.6% to a near three-month low of 9.6 million barrels in the week to Jan. 8, Enterprise Singapore data showed. - Weekly middle distillate inventories averaged 11.1 million barrels in 2019, having averaged 9.6 million barrels a week in 2018, Reuters calculations showed. - Overall, onshore middle distillate inventories were 13.3% lower year-on-year. - Light distillate stocks rose 466,000 barrels to a two-week high of 12.1 million barrels in the week to Wednesday, while fuel oil stocks rose 1.4 million barrels to a five-week high of 21.9 million barrels, Enterprise Singapore data showed. EIA INVENTORIES - U.S. crude oil stockpiles rose unexpectedly last week and gasoline inventories surged by their most in a week in four years, the Energy Information Administration said on Wednesday. - Crude inventories rose by 1.2 million barrels in the week ended Jan. 3 to 431.1 million barrels, compared with analysts' expectations for a 3.6 million-barrel drop in a Reuters poll. - Distillate stockpiles, which include diesel and heating oil, rose by 5.3 million barrels in the week to 139 million barrels, versus expectations for a 3.9 million-barrel rise, the EIA data showed. SINGAPORE CASH DEALS - Three jet fuel trades, no gasoil deals. - For more information, click OTHER NEWS - Oil prices climbed on Thursday after a rocket attack on Baghdad triggered fresh concern over the potential for conflict in the Middle East, a day after markets were roiled by an Iranian missile strike on Iraqi bases hosting U.S. forces. - China will for the first time allow foreign companies to explore for and produce oil and gas in the country, opening up the industry to firms other than state-run energy giants as Beijing looks to boost domestic energy supplies. ASSESSMENTS MID-DISTILLATES CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Spot Gas Oil 0.5% 77.74 -2.84 -3.52 80.58 GO 0.5 Diff -2.05 0.02 -0.97 -2.07 Spot Gas Oil 0.25% 78.39 -2.84 -3.50 81.23 GO 0.25 Diff -1.40 0.02 -1.41 -1.42 Spot Gas Oil 0.05% 79.68 -2.85 -3.45 82.53 GO 0.05 Diff -0.11 0.01 -8.33 -0.12 Spot Gas Oil 0.001% 80.15 -2.89 -3.48 83.04 GO 0.001 Diff 0.36 -0.03 -7.69 0.39 Spot Jet/Kero 78.12 -3.42 -4.19 81.54 Jet/Kero Diff -0.11 -0.15 -375.00 0.04 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 Shinjini Ganguli)
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