SINGAPORE: Asian refining margins for jet fuel rose on Wednesday as airlines continue to add capacity to their schedules with more international travellers returning to the skies.
Refining profit margins, also known as cracks, for jet fuel rose to $36.91 per barrel over Dubai crude during Asian trading hours, up from $33.78 per barrel a day earlier.
The jet fuel cracks are currently over three times stronger than their ten-year seasonal average of $11.50 a barrel for this time of the year, Refinitiv Eikon data showed.
Cash premiums for jet fuel were at $4.40 a barrel to Singapore quotes on Wednesday, compared with Tuesday’s $5.68 per barrel that was the highest since April 4. The prompt-month time spread for the aviation fuel in Singapore remained in backwardation to trade at $4.30 per barrel on Wednesday.
Middle-distillate inventories in the Fujairah Oil Industry Zone climbed 23.3% to a 10-week high of 1.9 million barrels in the week ended May 9, data via S&P Global Commodity Insights showed. This week’s stocks, however, were 53% lower compared with the corresponding week last year.
Weekly stocks in Fujairah have averaged 1.8 million barrels so far this year, compared with 3.5 million barrels in 2021, Reuters calculations showed.
US distillate inventories, which include diesel and heating oil, rose by 662,000 barrels in the week ended May 6, according to market sources, citing American Petroleum Institute figures.
Oil rose on Wednesday after plunging nearly 10% in the last two sessions, buoyed by supply concerns as the European Union works on gaining support for a Russian oil embargo and flows of Russian gas to Europe through a key transit point in Ukraine dried up.