Asia’s jet fuel cash differentials slumped to their biggest discounts in nearly a month on Thursday, while refining margins for the aviation fuel dropped for a second straight session as rising COVID-19 cases globally kept air travel demand subdued.
Cash discounts for jet fuel JET-SIN-DIF were at 45 cents a barrel to Singapore quotes on Thursday, the widest since July 3. They were at a discount of 40 cents a barrel on Wednesday.
The jet spot market would likely stay in discounts in the near term, as global airlines struggle due to travellers refraining from flying not just to keep away from infections but also to avoid inconveniences such as quarantine periods and medical tests, trade sources said.
Singapore Airlines Ltd warned passenger capacity may remain at less than half of pre-pandemic levels by its March 2021 year-end after slumping to a first-quarter net loss on Wednesday.
Meanwhile, Interglobe Aviation Ltd, which runs India’s largest airline Indigo, also posted its steepest quarterly loss in at least five years.
Refining margins or cracks for jet fuel dropped to $1.56 a barrel over Dubai crude during Asian trading hours on Thursday, down 25 cents from a day earlier.
The cracks have averaged $1.85 a barrel over Dubai crude so far this month, compared with an average of $2.01 per barrel in June, Refinitiv Eikon data showed.
INVENTORIES
– Singapore onshore middle distillate stocks dropped 3.1% to 13.4 million barrels in the week ended July 29, Enterprise Singapore data showed. O/SING1
– The weekly Singapore middle distillate inventories have averaged at 12.9 million barrels so far in 2020, Reuters calculations showed. This week’s stocks were up 31.3% year-on-year.
– U.S. distillate stockpiles rose last week to 178.4 million barrels, their highest since December 1982, U.S. Energy Information Administration data showed on Wednesday.
SINGAPORE CASH DEALS
– No jet fuel trades, no gasoil deals
OTHER NEWS
– Oil prices slipped on Thursday, weighed down by concerns that surging coronavirus infections around the globe could jeopardize a recovery in fuel demand just as major oil producers are set to raise output.
– Two refiners in South Korea, the world’s fifth largest crude oil importer, posted their biggest losses ever in the first half when oil prices slumped as the COVID-19 pandemic ravaged fuel demand.
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