Asia Distillates-Jet crack nudges lower but still near multi-month highs

Asia's jet fuel refining margins slipped to $13.42 a barrel on Friday, but were just 8 cents shy of a near two-year high reached in the previous week, Refinitiv data in Eikon showed. This came as oil prices hit a fresh three-year high on Friday, climbing above $85 a barrel on forecasts of a supply deficit over the next few months as rocketing gas and coal prices stoke a switch to oil products.

Asian refining margins for jet fuel have climbed in October to their highest levels since January 2020 as air travel demand recovers in Asia, according to analysts and Refinitiv data.

Asia-Pacific nations, home to some of the world's strictest pandemic-related travel rules, are gradually easing border restrictions resulting in a surge in flight bookings and travel enquiries.

The recovery in aviation fuel demand coincides with the peak heating season for kerosene - which belongs to the same grade of refined oils - lifting the outlook for the middle distillate fuel which has been the biggest drag on global oil refiners' margins since 2020.

Jet refining margins have also surged in Europe to their highest since the first quarter of 2020 amid a boost to air travel, while excess supplies disappeared as refiners cut output of the fuel, the International Energy Agency said in its monthly report on Thursday.

ARA INVENTORIES

Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell 2% to a three-week low of 1.99 MM tons in the week ended Oct. 14, according to Dutch consultancy Insights Global.

Gasoil demand up the Rhine river was stable, although demand for barges significantly increased, rising the freight rates. Gasoil stocks at the ARA hub hit a 17-month low of 1.97 MM tons in the week to Sept. 23. 

ARA jet fuel inventories rose 1% to a two-week of 875,000 tons, up from a near six-month low of 867,000 tons in the previous week. Jet fuel stocks rose on low demand and high imports.

 

 

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