SINGAPORE: Asia’s cash differentials for jet fuel slipped to their lowest level in over a month on Thursday, hurt by lacklustre buying interest in the physical market, while a COVID resurgence in China continues to dent demand in the region’s biggest aviation market.
Cash premiums for jet fuel dropped to $2.61 a barrel to Singapore quotes, the lowest since March 4. The premiums, which have shed about 68% in the last two weeks, were at $3.06 per barrel on Wednesday.
Travel during China’s three-day Tomb Sweeping Festival holiday earlier this week has tumbled by nearly two-thirds from last year, with air travel being the worst hit as total passenger numbers fell to an estimated 562,000, down 87% from a year ago.
Although recent easing of travel curbs have boosted airline capacity in several countries, the weakness in Chinese demand was weighing on the regional jet fuel market fundamentals, trade sources said.
Refining margins, or cracks, for jet fuel rose to $32.41 per barrel over Dubai crude during Asian trading hours, compared with $26.78 per barrel a day earlier.
Meanwhile, cash differentials for gasoil with 10 ppm sulphur content surged to $8.68 a barrel to Singapore quotes on Thursday, a fresh all-time high according to Reuters data that goes back to late 2011.
Singapore’s middle distillate inventories dipped 0.3% this week to a fresh low in more than eight years, official data showed on Thursday.
The middle distillate stocks dropped by 18,000 barrels to 7.03 million barrels in the week to Wednesday, a level not seen since Dec. 11, 2013, when they touched a low of 6.8 million barrels, according to Enterprise Singapore data.
The onshore middle distillate stocks this week were 45.8% lower than the year-ago period, Reuters calculations showed.
The biggest net exports of automotive diesel from Singapore this week went to Netherlands at around 35,400 tonnes, while about 19,752 tonnes went to Myanmar, Enterprise Singapore data showed.
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