Asia distillates-jet fuel cracks hit over 9-mos high as aviation demand starts to take off
Asian refining margins for jet fuel climbed for a third consecutive session on Tuesday, hitting a more than nine-month high, as aviation demand begins to find some support from increasing number of scheduled operating flights.
Refining margins, or cracks, for jet fuel gained 26 cents to $5.09 per barrel over Dubai crude during Asian trade on Tuesday, a level not seen since March 13. After the COVID-19 pandemic brought air travel to a virtual halt this year, refining profits for the aviation fuel have surged to multi-month highs in all key trading hubs in December on hopes of higher demand in 2021.
Global jet fuel markets are coming back to life, resuscitated by a rebound in air cargo demand, gradually recovering passenger traffic and hopes that COVID-19 vaccines will spur more international flights next year. Scheduled flights operating globally were 43.5% lower in the week to Monday, an improvement from 46.1% a week earlier, according to aviation data firm OAG.
Flights in India were down 36.4% year-on-year in the week to Dec. 14, compared with a 38.3% drop in the preceding week, while flights in Australia were 45.5% lesser from the corresponding period last year, as against a 51% drop in the previous week. Cash discounts for jet fuel narrowed to 13 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 27 cents per barrel on Monday.
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