Asia Distillates-Jet fuel cash premiums rise, cracks hover near multi-month highs

Asia's cash premiums for jet fuel climbed on Wednesday

  

SINGAPORE- Asia's cash premiums for jet fuel climbed on Wednesday as regional aviation demand recovers on easing travel curbs, while heating demand for kerosene ahead of winter is expected to provide further support in the coming weeks.

Cash premiums for jet fuel rose to 17 cents per barrel to Singapore quotes, up from 7 cents per barrel on Tuesday.

"The resumption of international air travel is injecting optimism into the Asian jet fuel complex," energy consultancy FGE said in a note.

"Several countries are accelerating their COVID-19 inoculation program to reach their vaccination targets, and we expect the subsequent easing or lifting of travel restrictions to further boost Asian jet fuel demand during the year-end holiday season."

Scheduled airline seat capacity in China rose 0.7% this week, while flight capacities in Japan and Australia were up 1.6% and 2.3%, respectively, according to aviation data firm OAG.

Refining margins or cracks for jet fuel were at $13.08 per barrel over Dubai crude during Asian trading hours, 10 cents lower from a day earlier, but still within close sight of multi-month highs touched in recent weeks.

The jet cracks, which also determine the profitability of closely related kerosene, have gained nearly 70% in the last month, Refinitiv Eikon data showed.

THAILAND DIESEL PRICES

- Thailand will continue limiting diesel prices at 30 baht ($0.8987) per litre to help consumers as global oil prices rise, its deputy prime minister said on Wednesday. 

- The support will be financed by the country's oil fund and a loan, Deputy Prime Minister Supattanapong Punmeechaow, who is also energy minister, told a news conference. He did not provide a timeframe for how long the price cap will be in place.

INVENTORIES

- Middle-distillate inventories in the Fujairah Oil Industry Zone jumped 36.4% to a two-week high of 3.5 million barrels in the week ended Oct. 18, data via S&P Global Platts showed. 

- The weekly stocks in Fujairah have averaged 3.7 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 3 million barrels in the week to Oct. 15, according to market sources, citing American Petroleum Institute figures. 

SINGAPORE CASH DEALS 

- No jet fuel trades, no gasoil deals

OTHER NEWS

- Oil prices fell on Wednesday after the Chinese government stepped up efforts to tame record high coal prices and ensure coal mines operate at full capacity as Beijing moved to ease a power shortage. 

(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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