Jet fuel cash discounts widen on lacklustre buying interests
SINGAPORE (Reuters) - Asia's cash discounts for jet fuel widened on the back of ample supplies, while the physical market for the aviation fuel remained subdued for the fifth consecutive session with no bids or deals on Tuesday.
Cash differentials for jet fuel were at a discount of 40 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 21 cents a barrel on Monday.
"The jet market should go up once the winter demand picks up pace," a Singapore-based trader said, adding that temperature levels in the region have not yet fallen so much that it would induce widespread heating requirements.
The winter months in the northern hemisphere typically bring peaking demand for kerosene, which belongs to the same grade of oil products as jet fuel and is widely used in heating. Refining margins for jet fuel determine the profitability of both.
Refining margins for jet fuel slipped to $18.22 a barrel over Dubai crude during Asian trade on Tuesday, from $18.41 per barrel on Monday.
Jet refining margins, however, are currently at their strongest levels for this time of the year since 2012, Refinitiv Eikon data showed.
The regrade, the price spread between jet and gasoil, for December widened to $2.07 a barrel on Tuesday, as compared with $1.93 a day earlier.
Cash differentials for 10ppm gasoil widened their discounts to 9 cents a barrel to Singapore quotes on Tuesday, as against a discount of 5 cents a barrel on Monday.
Refining margins for gasoil with 10ppm sulphur content were at $17.05 a barrel over Dubai crude, compared with from $17.38 in the previous session.
SINGAPORE CASH DEALS
- One gasoil deal, no jet fuel trades.
- Singapore trader Hin Leong bought 250,000 barrels of 2500ppm gasoil from Ocean Energy for Dec. 5-9 loading at a discount of $1.25 a barrel to Singapore quotes.
- For more information, please click [O/AS]
OTHER NEWS
- Refineries around the world are squeezing out every last drop of diesel while drowning in gasoline, in what could well become the new normal for the next few years.
The imbalance is a confluence of major shifts in oil markets - surging production of light U.S. shale oil, plummeting exports of heavier Venezuelan and Iranian crude, weakening gasoline demand and rising diesel consumption.
- The front-month Singapore 180-centistoke (cst) high-sulphur fuel oil refining margin hit a record high on Tuesday for the second time this month, boosted by tightening global supply and falling crude oil prices.
- Oil markets are entering an unprecedented period of uncertainty due to geopolitical instability, the head of the International Energy Agency said on Tuesday.
- Oil fell on Tuesday, folding under the weight of a broad stock market sell-off that undercut support to prices earlier in the day from expectations that OPEC will introduce new output curbs. [O/R]
ASSESSMENTS
MID-DISTILLATES
CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC
Spot Gas Oil 0.5% 80.22 -0.96 -1.18 81.18
GO 0.5 Diff -2.15 -0.02 0.94 -2.13
Spot Gas Oil 0.25% 81.26 -1.06 -1.29 82.32
GO 0.25 Diff -1.11 -0.12 12.12 -0.99
Spot Gas Oil 0.05% 81.67 -0.99 -1.20 82.66
GO 0.05 Diff -0.70 -0.05 7.69 -0.65
Spot Gas Oil 0.001% 82.28 -0.98 -1.18 83.26
GO 0.001 Diff -0.09 -0.04 80.00 -0.05
Spot Jet/Kero 83.14 -1.00 -1.19 84.14
Jet/Kero Diff -0.40 -0.19 90.48 -0.21
For a list of derivatives prices, including margins, please
double click the RICs below.
Brent M1
Gasoil M1
Gasoil M1/M2
Gasoil M2
Regrade M1
Regrade M2
Jet M1
Jet M1/M2
Jet M2
Gasoil 500ppm-Dubai
Cracks M1
Gasoil 500ppm-Dubai
Cracks M2
Jet Cracks M1
Jet Cracks M2
East-West M1
East-West M2
LGO M1
LGO M1/M2
LGO M2
Crack LGO-Brent M1
Crack LGO-Brent M2
(Reporting by Koustav Samanta; Editing by Rashmi Aich)
