Asia distillates-jet fuel cracks linger close to nine-month highs
SINGAPORE, Dec 14 (Reuters) - Asian refining margins for jet fuel rose on Monday, buoyed by an uptick in passenger traffic on some domestic flight routes and firmer air cargo demand ahead of the peak holiday season.
Refining profit margins, also known as cracks, for jet fuel rose 36 cents to $4.83 per barrel over Dubai crude during Asian trading hours, hovering close to a near nine-month peak touched last week.
Cracks for the aviation fuel in Singapore, which also determines the profitability of closely-related kerosene, have more than doubled in the last four weeks, Refinitiv Eikon data showed.
The jet fuel market, however, is expected to take years to go back to pre-pandemic levels, market watchers said. "For jet fuel, hit hardest by the pandemic... ultimately, a true rebound would require the resumption of international flights and cross-border tourism, which may be among the lasts to be returned, as COVID-19 headwinds ease," said Peter Lee, senior analyst at Fitch Solutions.
Cash differentials for jet fuel were at a discount of 27 cents a barrel to Singapore quotes, compared with a discount of 26 cents per barrel on Friday.
BOOM IN CONVERTING PASSENGER PLANES TO FREIGHTERS
From Air Canada to China's CDB Aviation, airlines and leasing firms are rushing to permanently convert older passenger jets into freighters, betting on a boom in e-commerce as the value of used planes tumbles amid the pandemic. -
Aviation analytics firm Cirium expects the number of P2F conversions globally will rise by 36% to 90 planes in 2021, and to 109 planes in 2022.
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