Asia’s middle distillate markets started the Dec. 27-31 trading week on a mixed note amid concerns of demand loss arising from restrictions caused by the growing number of coronavirus infections, says an article published in Platts.
At 10:20 am Singapore time (0220 GMT), the ICE February Brent crude oil futures contract was at $78.52/b, up $2.50/b (3.12%) from the Dec. 24 Asian close.
Jet fuel/kerosene
Brokers pegged front-month January-February jet fuel/kerosene time spread at plus 35 cents/b at 0220 GMT Dec. 28, narrowing 2 cents/b from plus 37 cents/b at 0430 GMT Asian close on Dec. 24, Platts data showed.
The FOB Singapore jet fuel/kerosene cash differential was assessed at plus 27 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments on Dec. 24, losing more than two-thirds of its value on the week. The cash differential was assessed at plus 87 cents/b to MOPS jet fuel/kerosene assessments at Dec. 17 close, Platts data showed.
Uncertainty looming from the new omicron variant exerted downward pressure on the Asian jet fuel/kerosene complex, with trade sources saying that changes in travel policies and border controls could hamper near-term demand. Thailand, for example, has suspended its quarantine-free travel for all foreign visitors from Dec. 22. The policy will be reviewed Jan. 4
Responding to the weaker domestic demand, Chinese refiners slashed jet fuel output to 2.26 million mt in November — the country’s lowest production since December 2013 — as China’s tight COVID-19 controls discouraged travel.
The Q1-Q2 2022 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged plus $1.16/b over Dec. 20-24, down from plus $1.33/b the week before.
Gasoil
Brokers pegged front-month January-February Singapore gasoil at plus 65 cents/b at 0220 GMT Dec. 28, inching down 1 cent/b from the 0430 GMT Asian close on Dec. 24.
The January Exchange of Futures for Swaps spread was pegged at minus $8.50/mt at 0220 GMT Dec. 28, narrowing from minus $11.95/mt at the Dec. 24 close, Platts data showed.
The near-term outlook for Asian gasoil was steady despite concerns arising from the omicron variant, with traders saying that regional requirements were still bolstering the market.
Singapore middle distillate stocks slipped 1.43% on the week to 7.92 million barrels in the week ended Dec. 22, Enterprise Singapore data released late Dec. 23 showed, reversing gains seen in the previous week as exports outpaced imports. Singapore’s gasoil exports rose 40.69% week on week to 383,776 mt, while imports fell 42.88% on the week to 144,393 mt.
The Q1-Q2 2022 gasoil swap spread averaged plus $1.46/b over Dec. 20-24, down from plus $1.51/b the week before.
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Source: Platts
