Asia Distillates-Jet cracks plunge amid gloomy aviation outlook
Asian refining margins for jet fuel flipped back to a negative territory, lingering close to multi-week lows, as the coronavirus-related travel restrictions continue to upset passenger demand in the aviation sector.
Refining margins, or cracks, for jet fuel dropped to minus 49 cents a barrel to Dubai crude on Thursday, compared with a premium of 29 cents a day earlier. The cracks were at a discount of 50 cents a barrel to Dubai crude on Tuesday, the weakest level since late May. The front-month time spread for the aviation fuel in Singapore, which has been in a contango structure since February, widened on Thursday to trade at a discount of 94 cents a barrel, Refinitiv Eikon data showed. "In Asia, we expect jet time-spreads to continue to drift sideways, as the recovery in Northeast Asia is offset by lockdowns in India, the Philippines and Australia," consultancy Energy Aspects said in a monthly note. "Until key international hubs within the region properly kickstart international flights, Asian markets will be stuck in limbo." The consultancy said it has lowered its August and September global jet demand forecasts by 260,000 barrels per day (bpd) and 230,000 bpd respectively from last month, bringing Q3 2020 demand to 4.8 million bpd, which is 3.5 million bpd lower year over year as Europe, Asia and the United States experience slower-than-anticipated growth.
Singapore onshore middle distillate stocks declined 2.2% to a three-week low of 14.2 million barrels in the week ended Aug. 19, Enterprise Singapore data showed. - The weekly Singapore middle distillate inventories have averaged at about 13 million barrels so far in 2020, Reuters calculations showed. This week's stocks were 41.4% higher year over year. - U.S. distillate stockpiles rose by 152,000 barrels, versus expectations for a 557,000-barrel drop, U.S. Energy Information Administration data showed on Wednesday. Overall distillate stockpiles were sitting at 177.8 million barrels, just off a 38-year high set last month.
India's Mangalore Refinery and Petrochemicals Ltd (MRPL) has offered 40,000 tonnes of jet fuel for Sept. 12 to 14 loading from the port of New Mangalore.
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