February 14, 2020 / 10:18 AM / 15 days ago

Asia Distillates-Jet fuel cracks plunge as coronavirus curbs aviation demand

    SINGAPORE, Feb 14 (Reuters) - Asian refining margins for jet fuel weakened further on
Friday, registering a weekly drop of nearly 9%, as aviation demand remained under pressure from
travel restrictions prompted by the coronavirus outbreak in China.
    Refining margins, or cracks, for jet fuel fell for a second consecutive session
to $9.71 a barrel over Dubai crude during Asian trade on Friday, down from $10.12 a barrel the
previous day.
    Jet fuel profits are at their lowest in a decade for this time of year, Refinitiv Eikon data
shows.
    The virus outbreak is curbing travel demand across the whole Asia Pacific region, with the 
impact on future bookings spreading beyond China.
    ForwardKeys, a travel analytics company, said that airline bookings across the region are
10.5% lower for March and April 2020 compared with last year. That drop excludes trips to and
from China and Hong Kong.
    Cash differentials for jet fuel JET-SIN-DIF were at a discount of 10 cents a barrel to
Singapore quotes, compared with 9 cents on Thursday.
    The February-March time spread for the aviation fuel in Singapore remained in
contango to trade at a discount of 18 cents a barrel.
    A contango market structure is one in which prompt prices are lower than those for future
delivery, which tends to encourage holders of physical barrels to store product for selling
later at higher prices. 
    Meanwhile, cash premiums for 10 ppm gasoil GO10-SIN-DIF were at 58 cents a barrel to
Singapore quotes on Friday, compared with 66 cents on Thursday.
    Cracks for gasoil with 10 ppm sulphur content dropped to $11.96 a barrel over
Dubai crude, down from $12.25 a day earlier.
    
    MARINE FUEL GAINS
    - January sales of marine fuels in Singapore jumped to a two-year high of 4.515 million
tonnes, official data showed on Friday, after the introduction of stricter global rules on
marine fuels at the start of the year.
    - The January sales volumes in Singapore, the world's top marine refuelling hub, were 8%
year on year and 1% higher than December, data from the Maritime and Port Authority of Singapore
(MPA) showed.
    - A total of 3,591 ships called at the Singapore hub in January for bunkers, up 1% from last
year but down from December's seven-year peak of 3,826 ships.
    
    ARA STOCKS
    - Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and
storage hub STK-GO-ARA dropped 4.2% to 2.4 million tonnes in the week to Feb. 13, data from
Dutch consultancy Insights Global showed.
    - Gasoil stocks fell largely because of higher exports to France, Insights Global's Lars van
Wageningen said.
    - ARA jet fuel inventories STK-JET-ARA were down 3.9% at 465,000 tonnes, the data showed.
    - Compared with a year earlier, jet fuel stocks were 26.1% lower, while gasoil inventories
were down 6.9%.
    
    SINGAPORE CASH DEALS
    - Four gasoil trades, no jet fuel deals
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    OTHER NEWS
    - The impact of the coronavirus on energy markets is worsening as a sharp fall in demand in
China, the world's largest importer of crude, strands oil cargoes off the country's coast and
prompts shippers to seek out alternative destinations.
    - Oil prices edged higher Friday, on track for their first weekly gain in six, backed by
expectations that leading producers will implement deeper output cuts to offset slowing demand.

    
    ASSESSMENTS
 MID-DISTILLATES                                                                        
 CASH ($/T)            ASIA CLOSE       Change   % Change   Prev Close  RIC
 Spot Gas Oil 0.5%               65.73     0.66       1.01       65.07  GO-SIN
 GO 0.5 Diff                     -1.76    -0.03       1.73       -1.73  GO-SIN-DIF
 Spot Gas Oil 0.25%              66.31     0.66       1.01       65.65  GO25-SIN
 GO 0.25 Diff                    -1.18    -0.03       2.61       -1.15  GO25-SIN-DIF
 Spot Gas Oil 0.05%              66.62     0.66       1.00       65.96  GO005-SIN
 GO 0.05 Diff                    -0.87    -0.03       3.57       -0.84  GO005-SIN-DIF
 Spot Gas Oil 0.001%             68.07     0.61       0.90       67.46  GO10-SIN
 GO 0.001 Diff                    0.58    -0.08     -12.12        0.66  GO10-SIN-DIF
 Spot Jet/Kero                   64.89     0.61       0.95       64.28  JET-SIN
 Jet/Kero Diff                   -0.10    -0.01      11.11       -0.09  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 David Goodman)
  
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