Asia’s middle distillate markets started the Dec. 20-24 trading week on a mixed note amid concerns about demand loss arising from restrictions caused by growing number of coronavirus infections, says a Platts market insight article.
At 10 am Singapore time (0200 GMT), the ICE February Brent crude oil futures contract stood at $71.85/b, down $1.67/b (2.27%) from the Dec. 17 Asian close. (73.52 Dec 17 close)
Jet fuel/Kerosene
Brokers pegged front-month January-February jet fuel/kerosene time spread at plus 44 cents/b at 0200 GMT Dec. 20, narrowing 15 cents/b from plus 59 cents/b at 0830 GMT Asian close Dec. 17, Platts data showed.
The FOB Singapore jet fuel/kerosene cash differential was assessed at plus 87 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessment Dec. 17, more than double the Dec. 13 close of plus 32 cents/b, Platts data showed.
Asian jet fuel/kerosene has been subdued as market participants await fresh cues. Despite concerns the omicron variant could impact demand, traders are focusing on the upcoming peak season for heating oil to keep a floor on prices.
On the supply side, 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 omicron variant, could shift near-term market dynamics.
The Q1-Q2 2022 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged plus $1.33/b over Dec. 13-17, up from plus $1.18/b the week before.
Gasoil
Brokers pegged front-month January-February Singapore gasoil at plus 57 cents/b at 0200 GMT Dec. 20, narrowing 4 cents/b from the 0830 GMT Asian close Dec. 17.
The January Exchange of Futures for Swaps spread was pegged at minus $8.08/mt at 0200 GMT Dec. 20, narrowing from minus $8.28/mt at the Dec. 17 Asian close, Platts data showed.
The near-term outlook for Asian gasoil was mixed amid concerns arising from the omicron variant, but this was tempered by still supportive demand, with traders saying that regional requirements were still bolstering the market.
Singapore middle distillate stocks climbed 8.46% week on week to 8.03 million barrels in the week ended Dec. 15, rebounding from a more than 3-year low of 7.41 million barrels in the prior week, Enterprise Singapore data released late Dec. 16 showed. Singapore’s gasoil exports were down 22.65% on the week at 272,782 mt, while imports more than doubled on the week to 252,802 mt.
The Q1-Q2 2022 gasoil swap spread averaged plus $1.51/b over Dec.13-17, up from plus $1.34/b the week before.
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Source: Platts
