SINGAPORE: Asian refining margins for jet fuel climbed on Friday to their highest in over two weeks, while cash differentials for the aviation fuel firmed to their smallest discounts in three weeks.
Refining margins, also known as cracks, for jet fuel rose to $14.76 a barrel over Dubai crude in a fourth consecutive session of gains, hitting their strongest levels since Jan. 15.
They were at $14.24 a barrel on Thursday.
Jet cracks, which also determine the profitability of kerosene, are currently about 7 percent lower than at this time in 2018, as a warmer-than-normal winter has kept a lid on heating demand for kerosene this year.
Following two weeks of declines, jet margins have risen about 10 percent this week in their biggest weekly gain since July last year.
Cash differentials for jet fuel narrowed to a discount of $1.36 a barrel to Singapore quotes on Friday, compared with Thursday's discount of $1.42 a barrel.
The draw in Singapore middle distillate stocks this week has boosted sentiment further in the market, which is expecting supplies to tighten over the next few weeks, trade sources said.
Singapore onshore middle-distillate stocks declined about 5 percent to 11.8 million barrels in the week to Wednesday, Enterprise Singapore data showed on Thursday.
A likely surge in air passenger travel during the Chinese New Year holidays is expected to boost aviation fuel demand, while some regional refineries scheduled for spring maintenance over the next couple of months would curb availability of barrels, market watchers said.
Chinese New Year, known as Lunar New Year in many parts of Asia, is on Feb. 5-6 this year.
Meanwhile, refining cracks for gasoil with 10ppm sulphur content climbed to $14.67 a barrel over Dubai crude during Asian trading hours, from $13.89 a barrel on Thursday.
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