Asia Distillates-Jet fuel cracks gain amid lukewarm aviation demand

Scheduled flight seats in Japan were 10.5% higher in the week


SINGAPORE- Asian refining margins for jet fuel rose for a second straight session on Wednesday, thanks to a slight improvement in global aviation demand as COVID-19 vaccinations are helping more passengers to return to the skies.

Refining margins, also known as cracks, for jet fuel in Singapore inched higher by 6 cents to $6.36 per barrel over Dubai crude during Asian trading hours, their strongest since May 21.

Global scheduled flight capacity rose 6.4% this week, but they still remained 40.4% lower compared with the corresponding week in pre-pandemic 2019, according to aviation data firm OAG.

Scheduled flight seats in Japan were 10.5% higher in the week to Monday, while scheduled seats in India were up 3.2% on-week, OAG data showed.

Global capacity in May was 279.9 million seats, 4.9% higher than 266.8 million seats in April, but 43% lower than 488.2 million seats in May 2019, the data firm said.

Cash discounts for jet fuel widened 20 cents per barrel to Singapore quotes, while the June/July time spread for the aviation fuel in Singapore traded at minus 30 cents per barrel.

Meanwhile, cash differentials for 10 ppm gasoil flipped into a discount of 12 cents per barrel on Wednesday, while the prompt-month spread turned into a contango of minus 3 cents per barrel.


- Middle-distillate inventories in the Fujairah Oil Industry Zone rose 12.6% to 3.8 million barrels in the week ended May 31, data via S&P Global Platts showed. 

- The weekly stocks in Fujairah have averaged 3.9 million barrels this year, compared with 4.2 million barrels in 2020, Reuters calculations showed.


- India's state-run refiner Indian Oil Corporation (IOC) has offered a combined cargo of light cycle oil (LCO) and high speed diesel (HSD) totalling 15,400-16,460 tonnes for loading over June 17-18 from Paradip, trade sources said.

- IOC has also offered another combined cargo of LCO and HSD totalling 32,400-35,460 tonnes for June 17-18 loading from Paradip.

- India's Nayara Energy sold 65,000-70,000 tonnes of 10-ppm gasoil for June 26-30 loading from Vadinar, a broker source said.


- Oil rose on Wednesday, supported by an OPEC+ decision to stick to its plan to restore supply to the market gradually and by the slow pace of nuclear talks between Iran and the United States.

For a list of derivatives prices, including margins, please double click the RICs below. 

(Reporting by Koustav Samanta; Editing by Subhranshu Sahu) (( 6870 3503)(Reuters Messaging:

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