Asia Distillates-Jet fuel cash premiums drop on weaker demand expectations


Asia Distillates-Jet fuel cash premiums drop on weaker demand expectations

SINGAPORE, April 16 (Reuters) – Asia’s jet fuel cash premiums dipped on Monday on concerns that the aviation fuel market may lose steam over the next couple of months, and upcoming summer demand will not provide as firm a support as expected.

Cash differentials for jet fuel JET-SIN-DIF fell to 99 cents a barrel to Singapore quotes on Monday, from $1.02 on Friday.

Summer travelling demand for jet fuel may not be as robust as the winter heating demand for kerosene this year, and the market might not sustain its strength beyond May, traders said.

Jet fuel and kerosene are closely related and belong to the same grade of oil products, with jet fuel margins determining the profitability of both.

Meanwhile, cash premiums for 10ppm gasoil GO10-SIN-DIF inched up to 26 cents a barrel to Singapore quotes, compared with 22 cents on Friday.

However, Chinese diesel shipments headed for the West are weighing on market sentiment, traders said, as that indicates that the region has too much diesel stock.

China’s Unipec is planning its third very large crude carrier (VLCC) shipment of diesel in May from Tianjin to Europe or West Africa. A VLCC can transport about 2 million barrels of oil at a time. VLCCs mean about six million barrels of diesel shipments. Adding that to the gasoil stocks in Asia will bring the numbers to around 17 million barrels (in Singapore stocks) and that level of inventories has never been seen in Singapore,” said Sukrit Vijayakar, director of energy consultancy Trifecta.

China is shipping towards the West to make sure Asian prices do not drop on its supplies, Vijayakar added.

Singapore onshore middle distillate stocks were about 11.2 million barrels in the week to April 11, the latest International Enterprise (IE) data showed. The highest on record for middle distillates stocks in Singapore STKMD-SIN was 16.6 million barrels in August 2010. O/SING1

SINGAPORE CASH DEALS:

– One gasoil deal, no jet fuel trade. O/AS

– PetroChina sold 150,000 barrels of 500ppm gasoil to Winson Oil for May 1-5 loading at a discount of 5 cents a barrel to Singapore quotes.

OTHER

– Oman’s oil minister Mohammed bin Hamad al-Rumhi called on all OPEC and non-OPEC producers who took part in the global supply cut pact to continue their cooperation to maintain suitable oil market conditions that encourage oil investments. Kuwait’s oil minister said on Monday a pact between OPEC and non-OPEC producers to curb supplies would run to the end of the year and market conditions would determine whether to extend it beyond the end of 2018. Oil fell more than 1 percent on Monday as markets opened following western air strikes in Syria over the weekend, while a rise in U.S. drilling for new production also dragged on prices. O/R

– U.S. energy companies added oil rigs for a second week in a row, following through on plans to spend more on drilling this year with crude prices at three-year highs, energy services firm Baker Hughes said on Friday. Fourteen companies have expressed interest in oil and exploration and development contracts to be auctioned by Iraq on April 25, the oil ministry in Baghdad said on Saturday. ($/T)

ASIA CLOSE

Change % Change

Prev

RIC

Close

Spot Gas Oil 0.5%

82.58

-0.74

-0.89

83.32 GO-SIN GO 0.5 Diff

-1.27

0.01

-0.78

-1.28 GO-SIN-DIF Spot Gas Oil 0.25%

82.33

-0.69

-0.83

83.02 GO25-SIN GO 0.25 Diff

-1.52

0.06

-3.80

-1.58 GO25-SIN-DIF Spot Gas Oil 0.05%

83.70

-0.70

-0.83

84.40 GO005-SIN GO 0.05 Diff

-0.15

0.06

-28.57

-0.21 GO005-SIN-DIF Spot Gas Oil 0.001%

84.11

-0.71

-0.84

84.82 GO10-SIN GO 0.001 Diff

0.26

0.04

18.18

0.22 GO10-SIN-DIF Spot Jet/Kero

85.60

-0.67

-0.78

86.27 JET-SIN Jet/Kero Diff

0.99

-0.03

-2.94

1.02 JET-SIN-DIF

For a list of derivatives prices, including margins, please

double click the RICs below.

M1

BRENTSGMc1

Gasoil M1

GOSGSWMc1

Gasoil M1/M2

GOSGSPDMc1

Gasoil M2

GOSGSWMc2

Regrade M1

JETREGSGMc1

Regrade M2

JETREGSGMc2

Jet M1

JETSGSWMc1

Jet M1/M2

JETSGSPDMc1

Jet M2

JETSGSWMc2

Gasoil 500ppm-Dubai

GOSGCKMc1

Cracks M1

Gasoil 500ppm-Dubai

GOSGCKMc2

Cracks M2

Jet Cracks M1

JETSGCKMc1

Jet Cracks M2

JETSGCKMc2

East-West M1

LGOAEFSMc1

East-West M2

LGOAEFSMc2

LGO M1

LGOAMc1

LGO M1/M2

LGOASPDMc1

LGO M2

LGOAMc2

Crack LGO-Brent M1

LGOACKMc1

Crack LGO-Brent M2

LGOACKMc2

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