Asia Distillates-Jet fuel cash premiums rise, front-month spread widens

Traders hope the regional jet fuel market would find support in coming months

  
A pipe transporting jet fuel offloaded from barges in seen at Kinder Morgan's Westridge Terminal on Burrard Inlet in Burnaby, British Columbia, Canada November 18, 2016. Image used for illustrative purpose.

A pipe transporting jet fuel offloaded from barges in seen at Kinder Morgan's Westridge Terminal on Burrard Inlet in Burnaby, British Columbia, Canada November 18, 2016. Image used for illustrative purpose.

REUTERS/Chris Helgren

SINGAPORE - Asia's cash premiums for jet fuel inched higher on Thursday and the Nov/Dec spread for the aviation fuel in Singapore widened its backwardated structure, while middle distillate inventories in Singapore rose to a five-week high.

Cash differentials for jet fuel  were at a premium of 12 cents per barrel to Singapore quotes, 2 cents higher from a day earlier.

The front-month time spread for jet fuel, which have stayed in a backwardation since the beginning of this month, traded at 40 cents per barrel on Thursday, compared with 38 cents on Wednesday.

Traders hope the regional jet fuel market would find support in coming months as easing COVID-19 curbs and year-end travel boost aviation demand, and heating demand for kerosene picks up ahead of winter.

Asia-Pacific airlines are offering more flights as some countries resume domestic travel, and some like Singapore allow quarantine-free travel for select vaccinated visitors. Australia's planned reopening of state and international borders has also led to a surge in bookings.

Refining margins for jet fuel  , which also determine the profitability of kerosene, slipped to $11.95 per barrel over Dubai crude during Asian trading hours, compared with $12.26 per barrel a day earlier.

INVENTORIES

- Singapore's middle distillate inventories rose 9.9% to 10.8 million barrels in the week to Oct. 27, bouncing back from a 22-month low touched last week, according to Enterprise Singapore data. O/SING1

- Weekly Singapore middle distillate inventories have averaged 12.6 million barrels this year, compared with an average of 13.9 million barrels in 2020, Reuters calculations showed. This week's stocks were 31.9% lower than a year earlier.

- U.S. distillate inventories, which include diesel and heating oil, fell by 432,000 barrels in the week to Oct. 22, versus expectations for a 2.3 million-barrel drop, the Energy Information Administration said on Wednesday. EIA/S

SINGAPORE CASH DEALS O/AS

- No gasoil deals, no jet fuel trades

OTHER NEWS

- Singapore's highest court has dismissed an appeal by oil tycoon Lim Oon Kuin and his two children after they were successfully sued for breach of fiduciary duties by the court-appointed managers of a company they once owned.

- Oil prices slumped to their lowest in two weeks after official figures showed a surprise jump in U.S. inventories of crude, and rising cases of COVID-19 in Europe, Russia, and some outbreaks of infections in China dented hopes for an economic recovery. O/R

(Reporting by Koustav Samanta; Editing by Krishna Chandra Eluri)


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