Asia Distillates-Jet fuel cracks climb amid easing travel curbs

Asian refining margins for jet fuel rose to their highest levels since March 2020

  

SINGAPORE- Asian refining margins for jet fuel rose to their highest levels since March 2020 on Tuesday as scheduled airline capacity in some countries were increased amid easing COVID-19 travel restrictions.

Despite firmer feedstock crude prices, refining margins or cracks for jet fuel  climbed to $7.91 per barrel over Dubai crude during Asian trading hours, from $7.74 per barrel a day earlier.

Scheduled airline seat capacity in Japan rose by about 74,500 seats or 3.6% this week, while flight capacity in South Korea and India rose 6.3% and 1.0%, respectively, according to aviation data firm OAG.

However, scheduled capacity in China fell by 605,000 seats or 3.9% this week, following a rise in COVID-19 infections in the Fujian province, which in turn pushed the global seat capacity lower by 0.3% to 78.8 million seats in the week to Monday, OAG data showed.

Global airlines this week have removed 20 million seats from their schedules for the rest of 2021, OAG said.

Cash differentials for jet fuel flipped back to a discount of 6 cents per barrel to Singapore quotes on Tuesday, compared with a premium of 10 cents per barrel a day earlier.

Meanwhile, cash premiums for gasoil with 10 ppm sulphur content GO10-SIN-DIF rose 8 cents to 45 cents per barrel to Singapore quotes, a level not seen since July last year.

CONSOLIDATION IN AIR LEASING SECTOR

- AerCap AER.N expects further consolidation of the global aircraft leasing sector in the wake of its takeover of General Electric's GE.N aircraft leasing business, which is due to close before the end of the year, a senior executive said.

- Asked at the Airline Economics conference in London if he expected further consolidation, AerCap Chief Commercial Officer Peter Anderson said: "I do ... and frankly it would be welcome. There is enough room in this industry for several large players."

TENDERS MDIS/TENDA

- India's Mangalore Refinery and Petrochemicals Ltd has offered 65,000 tonnes of 10 ppm gasoil for Oct. 11-13 loading from the port of New Mangalore. The tender closes on Sept. 22.

- MRPL was also offering 40,000 or 60,000 tonnes of jet fuel for Oct 13-15 loading in a tender closing on Sept. 23.

SINGAPORE CASH DEALS 

- One jet fuel deal, one gasoil trade

OTHER NEWS

- Oil prices rose on Tuesday, after sharp losses the previous session, amid tighter U.S. supplies, ending days of losses as global markets remain haunted by the potential impact on China's economy of a crisis at heavily indebted property group China Evergrande.

Soaring gas prices that threaten to push up winter fuel bills, hurt consumption and exacerbate a near-term spike in inflation are another blow to a world economy just getting back on its feet after the coronavirus shock. 

(Reporting by Koustav Samanta; Editing by Ramakrishnan M.) ((koustav.samanta@thomsonreuters.com)( +65 6870 3503)(Reuters Messaging: koustav.samanta.thomsonreuters.com@reuters.net))


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