Asia distillates-jet fuel cash premiums slide
Asia's cash premiums for jet fuel slipped to their lowest in more than three weeks on Friday, posting a weekly drop, as airlines continue to struggle with weak capacity amid Omicron-led travel restrictions.
Cash premiums for jet fuel dropped to 28 cents per bbl to Singapore quotes on Friday, the lowest since Nov. 29. The differentials have shed nearly 63% this week.
"Jet fuel demand this year has been largely undermined by travel restrictions. Even with the re-opening of borders across several Asian countries in recent months, international air travels are still limited, and jet fuel demand recovery has been relatively weak," said Serena Huang, Asia lead analyst at Vortexa.
Asia's jet fuel refining margins are on track to double by end-2021 from the previous year, but traders and analysts say it would likely take until the middle of this decade for aviation demand to return to pre-COVID levels.
Just as vaccinations and re-opening of national borders raised hopes for a pick-up in air travel, the highly contagious COVID-19 Omicron variant emerged last month, prompting governments to impose lockdowns and travel curbs again.
The refining margins, also known as cracks, for jet fuel dipped to $11.05 per bbl over Dubai crude during Asian trading hours, 34 cents lower from a day earlier.
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