The Asian middle distillates complex remains supported on the back of tight supplies and good demand in the week of April 4-8. Traders said that while some incremental spot supplies may be seen from China, the additional volumes are unlikely to bring much relief to the middle distillate complex, particularly for gasoil.
At 10:25 am Singapore time (0225 GMT), the front-month ICE June Brent crude oil futures contract was at $103.96/b, up 32 cents/b (0.31%) from the Asian close of $103.64/b April 1.
Jet fuel/Kerosene
Asian jet fuel/kerosene traders maintained a constructive view of the market for the week ahead, with sources saying that consistently lean supply amid improving demand has strengthened the sentiment for the product.
Brokers pegged the balance April-May jet fuel/kerosene time spread at plus $6.20/b at 0225 GMT April 4, narrowing 28 cents/b from plus $6.48/b at the Asian close April 1, S&P Global Commodity Insights data showed.
The FOB Singapore jet fuel/kerosene cash differential was assessed at plus $7.45/b to Mean of Platts Singapore jet fuel/kerosene assessments at the close of April 1, down 40 cents/b, or 5.1% week on week, S&P Global data showed.
Japan’s jet fuel production rose 1.3% week on week to 1.17 million barrels over March 20-26, latest data released by the Petroleum Association of Japan showed. Exports of the aviation fuel meanwhile, were also higher on the week, rising 10.8% to 662,519 barrels. Total stocks of jet fuel for the week ended March 26 were reported at 4.69 million barrels, up 3.1% on the week.
The Q2-Q3 jet fuel/kerosene swap spread averaged plus $10.46/b March 28-April 1, narrowing from plus $13.30/b the week before.
Gasoil
Lean inventory levels at major gasoil trading hubs in Asia, including Singapore and Fujairah, are expected to continue placing a floor under the Asian gasoil complex in the week ahead. However, the complex may continue to see volatility on the back of wide swings in the front-month gasoil EFS, which causes the economics of bringing swing Asian gasoil barrels to the West to fluctuate quickly.
Brokers pegged balance April-May Singapore gasoil at plus $9.80/b at 0225 GMT April 4, narrowing 2 cents/b from plus $9.82/b at the Asian close 0830 GMT April 1.
The April EFS spread was pegged at minus $63/mt at 0225 GMT on April 4, widening $9.36/mt from minus $53.64/mt at the close of April 1.
Singapore’s commercial middle distillates stockpiles slid 7.18% in the week of March 24-30, plunging to the lowest level seen in over eight years, latest Enterprise Singapore released late March 30 showed. The city-state remained a net exporter of gasoil for the week ended March 30, with total outflows of 327,288 mt outpacing inflows of 195,090 mt.
The Q2-Q3 gasoil swap spread averaged plus $12.57/b March 28-April 1, narrowing from plus $15.98/b the week before.
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Source: Platts
