Asia Middle Distillates: Key Market Indicators for April 18-22


The Asian middle distillates complex continued to diverge in the week of April 18-22 as jet fuel/kerosene may be weighed down by the prospect of rising supplies from China, while robust demand for gasoil amid still tight availability is likely to support gasoil values, says a Platts Market Insight.

At 11:00 am Singapore time (0300 GMT), front-month June ICE Brent crude oil futures contract was at $112.40/b, up $3.79 (3.49%) from the April 14 Asian close of $108.61/b.

Jet Fuel/Kerosene

  • Jet fuel/kerosene complex continued to lose ground as looming concerns of higher Chinese exports overshadowed emerging demand. Regional demand outlook has been improving as borders reopen, but anticipated supply may overwhelm still fresh demand that is just beginning to pick up.
  • Brokers pegged front-month May-June jet fuel/kerosene time spread at plus $6.20/b at 0300 GMT April 18, up $1.32/b from plus $4.88/b at the Asian close April 14, S&P Global Commodity Insights data showed.
  • FOB Singapore jet fuel/kerosene cash differential was assessed at plus $1.62/b to Mean of Platts Singapore jet fuel/kerosene assessments at the April 14 close, down 58 cents/b, or 26.36%, from the start of the week, S&P Global data showed.
  • The prolonged coronavirus-induced lockdowns and social distancing measures in China has meant that the country’s aviation sector and jet fuel demand has been severely affected. With surplus volumes building, market participants estimated that China’s April jet fuel exports could hit as high as 1 million mt in April, versus earlier estimates of 600,000-700,000 mt.
  • Q3-Q4 jet fuel/kerosene swap spread averaged plus $4.53/b over April 11-14, down from plus $4.92/b the week before.


  • The Asian ultra-low-sulfur diesel market will continue to see support from robust demand and tight supply, which have been widening product cracks to near record highs over the past week. However, medium-high sulfur gasoil grades are not expected to match the strength seen in the low sulfur gasoil market, as demand for those products remains relatively limited.
  • East-West arbitrage economics for gasoil are expected to remain unviable in the coming week, though it remains highly contingent on the rapidly evolving Russia-Ukraine conflict. Thin arbitrage flows to the West could allow more barrels to remain stuck within the Asia-Pacific region, providing a measure of relief to the Asian gasoil complex.
  • Brokers pegged front-month May-June Singapore gasoil at plus $9.75/b at 0300 GMT April 18, ticking down 2 cents/b from plus $9.77/b at the Asian close April 14.
  • May EFS spread was pegged at minus $41.20/mt at 0300 GMT April 18, widening $14.20/mt from minus $27/mt at the April 14 close.
  • Middle distillate inventories at UAE’s port of Fujairah plummeted 36.9% week on week as of April 11 to 1.18 million barrels, defying an overall trend of increasing oil product stockpiles in the Middle Eastern trading hub over the same period, according to latest data from Fujairah Oil Industry Zone, reflecting tight supply balances in Asia.
  • The Q3-Q4 gasoil swap spread averaged plus $4.98/b over April 11-14, narrowing from plus $5.15/b the week before.

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Source: Platts


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