Asia middle distillates: Key market indicators for March 21-25


The Asian middle distillates complex is likely to remain rangebound at elevated levels in the week of March 21-25 amid tight global supplies and steady demand, with any developments in the Russia-Ukraine war expected to provide fresh pricing cues.

At 10 am Singapore time (0200 GMT), the front-month ICE May Brent crude oil futures contract was at $110.88/b, up $2.69/b (2.49%) from the Asian close of $108.19/b March 18, says an article published in Platts.

Jet fuel/kerosene

Tight supply balance remains a key factor in pillaring support, industry sources said, but demand uncertainty stemming from fresh coronavirus-induced lockdowns in China is expected to place a limit on gains.

Brokers pegged the front-month April-May jet fuel/kerosene time spread at plus $5.45/b at 0200 GMT March 21, widening 65 cents/b from plus $4.80/b at the Asian close March 18, S&P Global Commodity Insights data showed.

The FOB Singapore jet fuel/kerosene cash differential was assessed at plus $4.72/b to Mean of Platts Singapore jet fuel/kerosene assessments at the close of March 18, rising 67 cents/b, or 16.54% week on week, S&P Global data showed.

The Japanese government announced March 16 that it would raise fuel subsidies to a maximum of Yen 25/l, or 21 cents/l, for March 17-23 from Yen 17.70/l a week ago, in a bid to curb rising retail prices of oil products. Kerosene retail prices were up Yen 0.70/l at Yen 115.10/l, increasing for a 10th consecutive week.

The Q2-Q3 jet fuel/kerosene swap spread averaged plus $7.25/b March 14-18, narrowing from plus $13.49/b the week before.


Lockdowns in China could free up more gasoil barrels for export in April, providing some relief to the market tightness as several regional refineries undergo turnarounds and buyers continue to shun Russian gasoil exports amid the ongoing Russia-Ukraine war.

Brokers pegged front-month April-May Singapore gasoil at plus $8/b at 0200 GMT March 21, widening $1/b from plus $7/b at the Asian close 0830 GMT March 18.

The April EFS spread was pegged at minus $100/mt at 0200 GMT on March 21, widening $27.17/mt from minus $72.83/mt at the close of March 18. Recent volatility in the EFS spread has resulted in rapidly fluctuating arbitrage economics to send Asian gasoil barrels to Europe, traders said.

Singapore’s commercial middle distillates stockpiles fell 4.74% in the week to March 16, according to data released late-March 17 by Enterprise Singapore, staying below the 8-million-barrel mark for the sixth straight week.

Inventories in Singapore declined as the city-state saw net exports of gasoil in the week, with total outflows of 239,939 mt outpacing inflows of 210,654 mt.

The Q2-Q3 gasoil swap spread averaged plus $9.37/b March 14-18, narrowing from plus $16.95/b the week before.

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Source: Platts


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