Asia Distillates-Jet fuel cash premiums rise on demand prospects



© Reuters. Asia Distillates-Jet fuel cash premiums rise on demand prospects

BENGALURU, May 16 (Reuters) – Asia’s cash premiums for jet fuel gained on Wednesday after slipping to a four-month low in the previous session, while cash differentials for 10ppm gasoil held near their highest this year amid steady demand.

Cash premiums for jet fuel JET-SIN-DIF reached 30 cents a barrel to Singapore quotes, compared with 3 cents a barrel on Tuesday.

Overall jet demand in the region looks relatively strong and the market will continue to remain in backwardation in the near term, two trade sources said.

“The numbers in terms of the region’s air traffic of late have been coming really strong, and that’s a very good thing for jet fuel,” one Singapore-based trader said.

India’s jet fuel demand in April rose to 0.69 million tonnes, about 13 percent higher than the same month last year, according to oil ministry data this week. Indian push to connect more cities via airports as an expanding middle class increasingly takes to the skies is expected propel the country’s demand for jet fuel to record highs this year. differentials for gasoil with 10 ppm sulphur content GO10-SIN-DIF fell by a cent to 53 cents a barrel to Singapore quotes on Wednesday. The highest premiums this year have been 55 cents a barrel.

FUJAIRAH STOCKS

– Middle distillates inventories in the Fujairah Oil Industry Zone (FOIZ) climbed by about 10 percent from a week earlier to 2.5 million barrels in the week ended May 14, data via S&P Global Platts showed. FUJAIRAH/

– Middle distillate inventories in the Fujairah oil hub remained below their weekly average of about 3 million barrels since records began in January 2017, Reuters calculations showed.

– Compared with year-ago levels, Fujairah middle distillate stocks were 13 percent lower.

MORGAN STANLEY SEES STRENGTH IN MIDDLE DISTILLATES, CRUDE OIL

– Over the next few years tightness in middle distillates would lead to strength in crude oil, the bank said. “We foresee a scramble for middle distillates that will drive crack spreads higher and drag oil prices with it,” Morgan Stanley (NYSE:) analysts said in a note dated May 15.

– As new regulations from the International Maritime Organization (IMO) make most shipping companies switch to lower-sulphur fuels, that would move 1.5 million barrels per day (bpd) of fuel oil demand into the middle distillate pool by 2020.

SINGAPORE CASH DEALS:

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

OTHER NEWS

– The volume of oil arriving in Asia is expected to hit a new high in July as Asian refiners seek arbitrage supplies to replace Middle Eastern crude after prices for Gulf grades rose, traders said on Wednesday.

U.S. crude arriving in Asia hit a record high of close to 25 million barrels in May with cargoes discharging in China, South Korea, Singapore, India and Malaysia, according to trade flows data on Eikon. Western naphtha shipments to Asia are likely to hit their lowest in three months in June at about 1.1 million tonnes, crimped by refinery maintenance in Europe, traders said on Wednesday. Oil prices fell on Wednesday, weighed down by ample supplies despite continuing OPEC-led output cuts and looming U.S. sanctions against major crude exporter Iran. O/R

– Global oil demand is likely to moderate this year as the price of crude nears $80 a barrel and many key importing nations no longer offer consumers generous fuel subsidies, the International Energy Agency said on Wednesday. ($/T)

ASIA CLOSE

Change

% Change

Prev Close RIC Spot Gas Oil 0.5%

88.89

-0.78

-0.87

89.67 GO-SIN GO 0.5 Diff

-1.85

-0.19

11.45

-1.66 GO-SIN-DIF Spot Gas Oil 0.25%

88.94

-0.52

-0.58

89.46 GO25-SIN GO 0.25 Diff

-1.80

0.08

-4.26

-1.88 GO25-SIN-DIF Spot Gas Oil 0.05%

90.16

-0.64

-0.70

90.80 GO005-SIN GO 0.05 Diff

-0.59

-0.05

9.26

-0.54 GO005-SIN-DIF Spot Gas Oil 0.001%

91.27

-0.60

-0.65

91.87 GO10-SIN GO 0.001 Diff

0.53

-0.01

-1.85

0.54 GO10-SIN-DIF Spot Jet/Kero

90.56

-0.45

-0.49

91.01 JET-SIN Jet/Kero Diff

0.30

0.27

900.00

0.03 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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