SINGAPORE: Asian refining margins for jet fuel dropped on Tuesday, partly hurt by firmer feedstock crude prices, while traders were concerned a resurgence in COVID-19 infections in several countries would continue to hammer aviation demand.
Refining margins, or cracks, for jet fuel fell 37 cents to $4.38 per barrel over Dubai crude during Asian trading hours.
The cracks for the aviation fuel are about 65% lower compared with the levels for this time of the year in pre-COVID 2019, Refinitiv Eikon data showed.
Scheduled seat capacity for global airlines this week dropped 1.4% from last week, according to aviation data firm OAG.
The full-month scheduled capacity for April was currently at 271.5 million seats, as of this week, down from 273.7 million seats planned last week, OAG data showed.
Global air carriers have removed 13 million seats from their May schedules this week, while June capacity was also cut by 5.3 million seats, weighed down by fresh virus waves in Europe, South America and parts of Asia, according to OAG.
India reported a record daily tally of COVID-19 infections this week amid worries over a further spike, while Thailand also reported a record daily jump in cases as the country deals with a third wave of infections and a highly contagious variant.
Cash discounts for jet fuel widened by 2 cents to 61 cents a barrel to Singapore quotes on Tuesday.
China’s crude oil imports jumped 21% in March from a low base of comparison a year earlier as refiners ramped up operation amid robust fuel demand post-COVID-19, though purchases slowed ahead of the maintenance season.
China’s refined oil product exports for March rose 28.9% from February to 6.83 million tonnes, but was still down from 7.26 million tonnes a year ago. Fuel exports in the first quarter reached 17.79 million tonnes, down 1.2% on year.