SINGAPORE: Asia’s cash premiums for jet fuel rose on Wednesday, while the March/April time spread for the aviation fuel in Singapore widened its backwardated structure.
The jet fuel cash differentials were at a premium of $1.27 a barrel to Singapore quotes, compared with $1.07 per barrel a day earlier. The front-month spread for the aviation fuel in Singapore traded at $1.89 per barrel on Wednesday.
Refining margins or cracks for jet fuel climbed to $14.95 a barrel over Dubai crude during Asian trading hours, up from $14.69 per barrel on Tuesday.
Finland’s Neste plans to produce its first batch of sustainable aviation fuel (SAF) in Singapore by the end of first quarter next year after the COVID-19 pandemic delayed its expansion project, a senior executive said on Wednesday. “It’s been delayed due to the pandemic as we were already hoping to be on stream in 2022,” Neste’s Executive Vice President for Renewable Aviation, Thorsten Lange, told Reuters. “But the revised plan is now fully on track.”
Neste produces renewable fuels, mainly from waste and residues such as used cooking oil, animal fat from food industry waste, fish fat from fish processing waste and residues from vegetable oil processing.
Neste plans to start SAF production at the end of first quarter 2023 and then onwards ramp up output to an annual capacity of 1 million tonnes, Lange said in an interview on the sidelines of the Singapore Airshow.
Middle-distillate inventories in the Fujairah Oil Industry Zone dropped 30.9% to a five-week low of 1.7 million barrels in the week ended Feb. 14, data via S&P Global Platts showed.
The weekly stocks in Fujairah have averaged 1.9 million barrels so far this year, compared with a weekly average of 3.5 million barrels in 2021, Reuters calculations showed.
US distillate inventories, which include diesel and heating oil, fell by 546,000 barrels in the week ended Feb. 11, according to market sources, citing American Petroleum Institute figures.
One gasoil deal, no jet fuel trades. Middle East benchmark Dubai crude soared to a record this week while spot premiums for April-loading Russian oil jumped to their highest in more than two years in Asia, trade sources said on Wednesday, as prices returned to pre-pandemic levels.
Oil prices recouped losses on Wednesday after slipping more than 3% in the previous session, as investors gauged the impact of easing Russia-Ukraine tensions against a taut balance of tight global supplies and recovering fuel demand.