SINGAPORE: Asian refining margins for jet fuel dipped as crude prices firmed on Tuesday, while cash discounts for the aviation fuel widened amid muted buying interest.
Refining margins, or cracks, for jet fuel fell to $13.44 a barrel over Dubai crude during Asian trade, against $14.21 on Monday.
Crude oil prices rose on Tuesday morning, supported by OPEC-led supply cuts and US sanctions against Iran and Venezuela, though analysts expect surging US production and concerns over economic growth to keep markets in check.
Jet cash differentials widened their discounts to 29 cents a barrel to Singapore quotes on Tuesday, compared with Monday's discount of 20 cents a barrel.
The Singapore cash discounts for jet fuel, however, have narrowed considerably over the past few sessions on expectations of tighter supply, but traders said the upside is likely to be limited. The differentials were at a discount of $1.69 a barrel two weeks ago.
"We're in mid-February and the market is looking at March positions, which is usually almost the end of winter. So the period of heating kerosene demand is ending but travelling aviation demand will start picking up," one Singapore-based trader said.
"But as yet we haven't seen any movement and it is still a bit quiet ... I doubt the Singapore cash differentials would flip back to premiums any time soon."
Meanwhile, cash discounts for 10ppm gasoil <GO10-SIN-DIF> widened to 35 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 33 cents a day earlier.
Refining cracks for gasoil with 10ppm sulphur content dropped to $14.39 a barrel over Dubai crude on Tuesday, down from a near four-week high of $15.05 on Monday.
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