Asia Distillates-Jet fuel cracks post biggest weekly gain in 2 months
Asian refining margins for jet fuel increased, posting their biggest weekly gain in two months, while cash discounts for the aviation fuel narrowed amid limited supplies. The regional jet fuel market is expected to pick up further strength gradually as countries ease travel restrictions in coming months, although the usual seasonal boost during the Lunar New Year holidays would mostly remain dampened this year, trade sources said.
Refining margins, or cracks, for jet fuel rose to $4.43 per barrel over Dubai crude during Asian trading hours, the strongest since Jan. 18. The cracks have gained 25.5% this week, the steepest weekly rise since Dec. 4. "Our forecast is for traffic to return to half of 2019 levels in 2021," Alexandre de Juniac, director general and chief executive of the International Air Transport Association (IATA) said in a statement this week. "But the proliferation of restrictions on travel that we have seen since the beginning of the year could make even that modest outlook very challenging," he added.
Global air passenger demand in 2020 was 65.9% lower than 2019 levels, while global air cargo demand last year was about 11% below 2019, IATA data showed on Wednesday. Some market watchers believe aviation passenger demand might see a surge soon after the majority of travel restrictions are lifted as a lot of people are bored of not travelling. Cash differentials for jet fuel were at a discount of 15 cents per barrel to Singapore quotes on Friday, compared with a 21-cent discount a day earlier.
ARA STOCKS - Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose 3.4% to 2.7 million tonnes in the week to Feb. 2, data from Dutch consultancy Insights Global showed.
The data showed ARA jet fuel inventories climbed 3.8% to 937,000 tonnes.
Sri Lanka's Ceylon Petroleum Corp (Ceypetco) is seeking gasoil for delivery into Colombo over the eight months between May and December this year.
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