SINGAPORE: Asia’s cash differentials for jet fuel flipped to a premium on Tuesday, while the Jan/Feb time spread for the aviation fuel in Singapore widened its backwardated structure.
Cash differentials for jet fuel were at a premium of 10 cents per barrel to Singapore quotes, compared with a discount of 5 cents per barrel a day earlier.
The prompt-month spread for jet fuel traded at 61 cents per barrel on Tuesday, compared with 37 cents a barrel on Monday.
Refining margins or cracks for jet fuel rose to $10.75 per barrel over Dubai crude during Asian trading hours on Tuesday, up from $10.43 a barrel on Monday.
The jet cracks averaged $6.91 per barrel in 2021, compared with $3.02 a barrel in 2020, Refinitiv Eikon data showed.
But just when wider vaccinations and border agreements between countries were brewing hopes for international travel, the highly contagious Omicron variant of the coronavirus emerged in November, prompting reimposition of travel curbs.
The jet fuel market, however, is expected to gain support in coming months, although overall aviation demand would likely still take years to return to pre-pandemic levels, traders and industry analysts said.
China has issued 13 million tonnes of refined fuel export quotas under the first batch for 2022, three industry sources told Reuters on Tuesday. China also issued first batch 2022 low-sulphur fuel oil export quotas of 6.5 million tonnes, the sources added.