Asia Distillates-Jet fuel cash premiums rise, cracks slip

Asia's cash differentials for jet fuel rose on Tuesday

  

SINGAPORE- Asia's cash differentials for jet fuel rose on Tuesday, supported by active buying interests in the physical market and pockets of demand from some domestic flight routes, primarily led by China.

A resurgence in COVID-19 infections and renewed travel restrictions in key Asian markets including India and Japan, however, would weigh on the regional jet fuel market in the near term, market watchers said.

China's flight seat capacity continued its upward streak this week, rising 1.5% compared with a week earlier, and exceeding the pre-pandemic levels of 2019 by 9.8%, according to aviation data firm OAG.

But India's scheduled capacity in the week to Monday slumped by 285,000 seats, or 12.8%, week-on-week, while Japan's capacity dropped by 157,000 seats, or 9%, from a week ago, OAG data showed.

The sluggish consumption in the East, however, has opened arbitrage for jet fuel cargoes to the West. 

April's total import volumes from the East of Suez to Europe were at their highest in six months, and traders expect the re-opening of European markets to stimulate more imports.

Refining margins for jet fuel in Singapore dipped to $6.09 per barrel over Dubai crude during Asian trading hours, down from $6.15 a barrel on Monday.

CHINA APRIL FUEL EXPORTS

- China's diesel exports in April rose 5.7% from the same period last year on resurgent overseas demand and refiners' efforts to reduce bulging domestic stocks

- Diesel shipments reached 2.72 million tonnes last month, down from 2.81 million tonnes in March, data from the General Administration of Customs showed on Tuesday.

- Jet kerosene exports were 660,000 tonnes in April, down 67.5% from the record high of 2.03 million tonnes a year earlier.

INDIA'S CLEAN PRODUCTS EXPORTS SURGE

- India's clean products exports have jumped to 1.5 million barrels per day (bpd) in the first half of May, 65% higher compared with the same period last month, according to data analytics firm Vortexa.

- Gasoline and diesel exports from the country have registered the largest month-on-month increase of 85% and 65%, respectively, during this period as demand slowed due to a fresh wave of the pandemic, Vortexa said in a weekly report.

SINGAPORE CASH DEALS O/AS

- One gasoil deal, one jet fuel trade

OTHER NEWS

- Oil rose on Tuesday to hit $70 a barrel for the first time since March, as expectations of demand recovery following reopenings of the European and U.S. economies offset concern over spreading coronavirus cases in Asia. 

(Reporting by Koustav Samanta; editing by Uttaresh.V and Devika Syamnath) ((koustav.samanta@thomsonreuters.com)(+65 6870 3503)(Reuters Messaging: koustav.samanta.thomsonreuters.com@reuters.net))

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