SINGAPORE, Feb 12 (Reuters) - Asian cash differentials for jet fuel inched down on Wednesday, while the prompt-month spread widened its contango amid concerns that aviation demand would remain lacklustre in the short term due to travel restrictions stemming from the coronavirus outbreak. Cash differentials for jet fuelwere at a premium of 2 cents a barrel to Singapore quotes, compared with a premium of 3 cents per barrel a day earlier. The February/March time spread for the aviation fuel widened its contango to trade at a discount of 15 cents per barrel, compared with a discount of 12 cents a barrel on Tuesday, Refinitiv Eikon data showed. In a contango market structure, prompt prices are lower than those for future delivery. This tends to encourage holders of physical barrels to store the product for selling later to secure higher prices. Refining margins, or cracks, for jet fuel rose 25 cents to $10.37 per barrel over Dubai crude during Asian trading hours. Earlier last week, the cracks hit their lowest level since April 2016 as global airlines suspended flights to China due to the coronavirus epidemic, which had killed more than 1,100 people by the end of Tuesday. China's aviation regulator said it will support restructuring or mergers to help airlines cope with the outbreak, noting that it has hurt the bottom lines of many carriers. The Civil Aviation Administration of China said it hopes countries will lift virus-related travel restrictions as soon as possible, in line with the guidance from the World Health Organization and the International Civil Aviation Organization. Meanwhile, refining margins for gasoil with 10 ppm sulphur content rose to $12.47 per barrel over Dubai crude, up from $12.42 per barrel on Tuesday. Cash premiums for 10 ppm gasoil slipped 1 cent from a day earlier to 72 cents per barrel to Singapore quotes. VLSFO MARKET DROPS FROM RECORD HIGHS - Asia's market for very low-sulphur fuel oil (VLSFO) has retreated from its record high near the start of the year, as demand crumbles under seasonal factors and an epidemic in China, while supply expectations improve, analysts and traders said. - Cooling VLSFO prices are also an early sign of stabilizing market fundamentals after months of volatility sparked by adoption of new global marine fuel rules in one of the biggest shake-ups in decades for the shipping and oil industries. - Five trade sources said the spread of coronavirus in China had exacerbated a slowdown in demand for marine fuels, also known as bunkers, that is typical of the period around the Lunar New Year holiday, extended this year to fight the disease. FUJAIRAH STOCKS - Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 27.3% from a week earlier to 2.9 million barrels in the week to Feb. 10, data via S&P Global Platts showed. - Stocks of middle distillates in the Fujairah oil hub have averaged 3.7 million barrels so far in 2020, compared with a weekly average of 2.4 million barrels in 2019, Reuters calculations showed. - The weekly Fujairah middle distillate stocks were 25% higher than a year earlier. API INVENTORY DATA - U.S. crude oil stocks rose in the most recent week, while gasoline inventories increased and distillate stocks fell, data from industry group the American Petroleum Institute showed on Tuesday. - Crude inventories rose by 6 million barrels in the week to Feb. 7 to 438.9 million barrels, compared with analysts' expectations for a build of 3 million barrels. - Distillate fuel inventories, which include diesel and heating oil, fell by 2.3 million barrels, compared with expectations for a 557,000-barrel draw, the data showed. SINGAPORE CASH DEALS - Four gasoil trades, no jet fuel deals - For more information, click OTHER NEWS - Oil prices extended gains as China reported its lowest daily number of new coronavirus cases since late January, stoking investor hopes that fuel demand in the world's second-largest oil consumer may begin to recover from the epidemic. - The oil market this week took a turn that could prompt traders to consider storing oil offshore as a growing crude surplus threatens to worsen. ASSESSMENTS MID-DISTILLATES CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Spot Gas Oil 0.5% 65.13 1.27 1.99 63.86 GO 0.5 Diff -1.73 0.00 0.00 -1.73 Spot Gas Oil 0.25% 65.71 1.27 1.97 64.44 GO 0.25 Diff -1.15 0.00 0.00 -1.15 Spot Gas Oil 0.05% 66.14 1.15 1.77 64.99 GO 0.05 Diff -0.72 -0.12 20.00 -0.60 Spot Gas Oil 0.001% 67.58 1.26 1.90 66.32 GO 0.001 Diff 0.72 -0.01 -1.37 0.73 Spot Jet/Kero 64.46 1.48 2.35 62.98 Jet/Kero Diff 0.02 -0.01 -33.33 0.03 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 Subhranshu Sahu)
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