SINGAPORE- Asia's cash differentials for jet fuel flipped into a narrow premium on Wednesday, supported by an uptick in buying interest for physical cargoes, while the prompt-month spread remained in a backwardated structure.
The jet fuel cash differentials JET-SIN-DIF were at a premium of 6 cents per barrel to Singapore quotes on Wednesday, compared with a discount of 6 cents a barrel on Tuesday.
The Sept/Oct time spread for the aviation fuel in Singapore traded at 2 cents per barrel, while the front-month spread traded at 3 cents per barrel on Wednesday.
Although a persistent rise in COVID-19 infections in several countries are weighing on the near term aviation outlook, traders expect the jet fuel market to find support in coming months as winter heating demand for kerosene picks up ahead of winter.
Refining margins or cracks for jet fuel slipped 5 cents to $6.90 per barrel over Dubai crude during Asian trade on Wednesday. The cracks, however, have gained nearly 26% in the last month, Refinitiv Eikon data showed.
CHINA REFINERY OUTPUT SINKS
- China's crude oil throughput continued to fall in August, with daily runs hitting the lowest since May 2020, as a resurgence in coronavirus cases and a drastic cut in fuel export quotas hurt production at refineries.
- Processing volumes in August were 58.35 million tonnes, or 13.74 million barrels per day (bpd), down 2.2% from a year earlier, data from the National Bureau of Statistics (NBS) showed on Wednesday. That was also less than the 13.91 million bpd in July, which was a 14-month low.
INVENTORIES
- Middle-distillate inventories in the Fujairah Oil Industry Zone fell 1.7% to a two-week low of 3.92 million barrels in the week ended Sept. 13, data via S&P Global Platts showed.
- The weekly stocks in Fujairah have averaged 3.8 million barrels this year, compared with 4.2 million barrels in 2020, Reuters calculations showed.
- U.S. distillate fuel inventories, which include diesel and heating oil, fell by 2.9 million barrels in the week to Sept. 10, according to two market sources, citing American Petroleum Institute figures.
SINGAPORE CASH DEALS
- Three jet fuel deals, two gasoil trades
OTHER NEWS
- Oil prices climbed on Wednesday after industry data showed a larger than expected drawdown in U.S. crude inventories and on expectations demand will rise as vaccination roll-outs widen.
- China's refusal to accept requests for deeper carbon emissions cuts during recent visits from the top climate envoys of the United States and Britain may undermine progress at the upcoming global climate summit in Glasgow in November, experts say.
(Reporting by Koustav Samanta; Editing by Rashmi Aich) ((koustav.samanta@thomsonreuters.com)( +65 6870 3503)(Reuters Messaging: koustav.samanta.thomsonreuters.com@reuters.net))
