Asia Distillates-Jet fuel cash differentials flip to discounts
Asia's cash differentials for jet fuel flipped to discounts from premiums, hurt by lackluster demand for physical cargoes and overall weakness in the region's aviation sector.
Cash differentials for jet fuel were at a discount of 11 cents per barrel to Singapore quotes, compared with a premium of 4 cents per barrel in the previous session.
The aviation fuel market remained under pressure for a major part of last year due to slowing regional economic activity and U.S.-China trade war, which dampened air freight demand.
Global air cargo demand fell in November 2019 compared to the year-ago period, recording the 13th straight month of year-on-year declines in freight volumes, the International Air Transport Association (IATA) said in statement on Wednesday.
"Asia-Pacific airlines saw demand for air freight contract by 3.7% in November 2019, compared to the same period in 2018. This was the sharpest drop in freight demand of any region for the month," the IATA said.
The January/February time spread for the aviation fuel in Singapore narrowed to trade at a premium of 5 cents a barrel on Thursday, from 14 cents in the day earlier.
Refining margins or cracks for jet fuel inched up 1 cent to $13.55 per barrel over Dubai crude during Asian trade on Thursday. Meanwhile, cracks for gasoil with 10 ppm sulfur content rose for a second consecutive session to $14.95 per barrel over Dubai crude on Thursday, up from $14.54 per barrel on Wednesday.
Cash premiums for 10 ppm gasoil <GO10-SIN-DIF> were at 36 cents per barrel over Singapore quotes on Thursday, as against a 39-cent premium in the previous session.
Comments