Asia Distillates-Jet fuel cracks plunge as coronavirus curbs aviation demand

SINGAPORE, Feb 14 (Reuters) - Asian refining margins for jet fuel weakened further on Friday, registering a weekly drop of nearly 9%, as aviation demand remained under pressure from travel restrictions prompted by the coronavirus outbreak in China. Refining margins, or cracks, for jet fuel fell for a second consecutive session to $9.71 a barrel over Dubai crude during Asian trade on Friday, down from $10.12 a barrel the previous day.

Jet fuel profits are at their lowest in a decade for this time of year, Refinitiv Eikon data shows. The virus outbreak is curbing travel demand across the whole Asia Pacific region, with the impact on future bookings spreading beyond China. ForwardKeys, a travel analytics company, said that airline bookings across the region are 10.5% lower for March and April 2020 compared with last year. That drop excludes trips to and from China and Hong Kong. Cash differentials for jet fuel <JET-SIN-DIF> were at a discount of 10 cents a barrel to Singapore quotes, compared with 9 cents on Thursday. The February-March time spread for the aviation fuel in Singapore remained in contango to trade at a discount of 18 cents a barrel. A contango market structure is one in which prompt prices are lower than those for future delivery, which tends to encourage holders of physical barrels to store product for selling later at higher prices.

Meanwhile, cash premiums for 10 ppm gasoil <GO10-SIN-DIF> were at 58 cents a barrel to Singapore quotes on Friday, compared with 66 cents on Thursday. Cracks for gasoil with 10 ppm sulphur content dropped to $11.96 a barrel over Dubai crude, down from $12.25 a day earlier. MARINE FUEL GAINS - January sales of marine fuels in Singapore jumped to a two-year high of 4.515 million tonnes, official data showed on Friday, after the introduction of stricter global rules on marine fuels at the start of the year. 

The January sales volumes in Singapore, the world's top marine refuelling hub, were 8% year on year and 1% higher than December, data from the Maritime and Port Authority of Singapore (MPA) showed. - A total of 3,591 ships called at the Singapore hub in January for bunkers, up 1% from last year but down from December's seven-year peak of 3,826 ships. ARA STOCKS - Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub <STK-GO-ARA> dropped 4.2% to 2.4 million tonnes in the week to Feb. 13, data from Dutch consultancy Insights Global showed. 

Gasoil stocks fell largely because of higher exports to France, Insights Global's Lars van Wageningen said. - ARA jet fuel inventories <STK-JET-ARA> were down 3.9% at 465,000 tonnes, the data showed. - Compared with a year earlier, jet fuel stocks were 26.1% lower, while gasoil inventories were down 6.9%. SINGAPORE CASH DEALS - Four gasoil trades, no jet fuel deals

OTHER NEWS - The impact of the coronavirus on energy markets is worsening as a sharp fall in demand in China, the world's largest importer of crude, strands oil cargoes off the country's coast and prompts shippers to seek out alternative destinations. - Oil prices edged higher Friday, on track for their first weekly gain in six, backed by expectations that leading producers will implement deeper output cuts to offset slowing demand.

 

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