Asia Middle Distillates: Key Market Indicators for Dec 13-17

According to a recent Platts Market Insight article, Asian middle distillate markets started the Dec. 13-17 trading week on a steady note as participants awaited fresh pricing cues for gasoil and jet fuel/kerosene.

At 10 am Singapore time (0200 GMT), the ICE February Brent crude oil futures contract stood at $76.05/b, up 90 cents/b (1.19%) from the Dec. 10 Asian close.

Jet fuel/Kerosene

• Brokers pegged the balance December-January jet fuel/kerosene time spread at plus 45 cents/b at 0200 GMT Dec. 13, narrowing 14 cents/b from plus 59 cents/b at 0830 GMT Asian close Dec. 10, S&P Global Platts data showed.
• The FOB Singapore jet fuel/kerosene cash differential was assessed at plus 38 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessment Dec. 10, unchanged from Dec. 6, Platts data showed.
• The Asian jet fuel/kerosene market remains resilient as participants focus on the upcoming peak season for heating oil amid tight regional supply, despite concerns the new omicron variant could potentially impact demand, sources said.
• Traders noted that increasing supply streams in the region due to a closed East-West arbitrage, coupled with border restrictions introduced in response to the new omicron variant, could shift market dynamics in the near term.
• The Q1-Q2 2022 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged plus $1.18/b over Dec. 6-10, up from plus 80 cents/b the week before.

Gasoil

• Brokers pegged the balance December-January gasoil market structure at plus 68 cents/b at 0200 GMT Dec. 13, narrowing 5 cents/b from the 0830 GMT Asian close Dec. 10.
• The January Exchange of Futures for Swaps spread was pegged at minus $9/mt at 0200 GMT Dec. 13, narrowing from minus $9.89/mt at the Dec. 10 Asian close, Platts data showed.
• The near-term outlook for Asian gasoil was subdued, industry sources said, with the diversion of arbitrage cargoes into the region and uneven demand recovery weighing on sentiment.
• Singapore middle distillate stocks fell 7.5% week on week to a more than three-year low of 7.41 million barrels Dec. 8, Enterprise Singapore data released late Dec. 9 showed, supported by a recovery in regional demand. Singapore’s gasoil exports rose 70.68% on the week to 352,687 mt, mainly to Australia at 114,044 mt, Indonesia at 52,051 Nah mt and Vietnam at 34,932 mt, while gasoil imports fell 62% to 86,697 mt, mainly from Taiwan at 59,911 mt, India at 18,802 mt and Malaysia at 7,982 mt.
• The Q1-Q2 2022 gasoil swap spread averaged plus $1.34/b over Dec. 6-10, up from plus $1.04/b the week before.