Asia distillates-Jet fuel cracks hover near multi-month peak as aviation demand ticks up
SINGAPORE, Dec 22 (Reuters) - Asia's refining margins for jet fuel dipped on Tuesday but remained within close sight of multi-month highs touched last week, supported by seasonal heating demand for kerosene and a slow but gradual recovery in regional aviation demand.
However, a fast-spreading new coronavirus strain that has shut down much of Britain has prompted several countries to reimpose travel curbs on UK routes, triggering worries about fuel demand recovery and near-term air travel outlook.
Refining margins, or cracks, for jet fuel slipped 24 cents to $4.36 per barrel over Dubai crude during Asian trade on Tuesday.
The jet cracks, which also determine the profitability of closely-related kerosene, have gained 37% in the last month, Refinitiv Eikon data showed.
Cold season in the northern hemisphere typically brings peak demand for kerosene in Japan and Korea, where the fuel is used as a heating oil to fend off winter chill.
Temperatures in Seoul are expected to stay mostly below normal over the next 15-day period, while temperatures in Tokyo are predicted to be lower than normal in the first week of January, weather forecast models on Refinitiv Eikon showed.
Meanwhile, supporting a steady uptick in aviation demand, scheduled flights operating globally were 40.5% lower in the week to Monday, an improvement from 43.5% a week earlier, according to aviation data firm OAG.
Flights in India were down 34.2% year-on-year in the week to Dec. 21, compared with a 36.4% drop in the preceding week, while flights in Australia were 38% lesser from the corresponding period last year, as against a 45.5% drop in the previous week, OAG data showed.
Cash discounts for jet fuel <JET-SIN-DIF> narrowed by a cent to 15 cents per barrel to Singapore quotes on Tuesday.
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