SINGAPORE: Asian refining profits for jet fuel surged to a record high on Wednesday on firmer travel demand.
Refining margins, also known as cracks, for jet fuel soared to $52.74 per barrel over Dubai crude during Asian trade on Wednesday, the highest on record according to Refinitiv Eikon data that goes back to 2009. They were at $48.91 per barrel a day earlier.
The jet fuel cracks have gained 33.8% this month as global airline capacity continues to grow even airlines have resorted to measures such as increasing fares and introducing fuel surcharges on tickets to counter soaring jet fuel prices.
Meanwhile, Asian refining margins for 10 ppm gasoil jumped to $60.17 per barrel over Dubai crude on Wednesday, a new high, according to Refinitiv eikon data that goes back to 2014. The cracks stood at $56.21 per barrel on Tuesday.
“With the start of summer, gasoline prices and cracks are breaking new records, but middle distillate markets continue to experience unprecedented shortages and prices,” the International Energy Agency (IEA) said in its monthly oil report on Wednesday.
“With a surge in air travel, jet kerosene cracks spiked to record levels in May. There is little hope that the undersupply will ease in the near future given strong demand growth and constrained refinery output.”
Cash differentials for jet fuel rose to a premium of $3.16 a barrel to Singapore quotes on Wednesday, compared with $2.91 per barrel on Tuesday.
The June/July time spread for jet fuel traded at $3.35 per barrel on Wednesday, while the July/August spread traded at $4.25 per barrel.
Middle-distillate inventories in the Fujairah Oil Industry Zone rose 13.9% to 2.7 million barrels in the week ended June 13, data via S&P Global Commodity Insights showed.
This week’s stocks were about 31% lower compared with the corresponding week last year.
Weekly stocks in Fujairah have averaged 1.9 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 230,000 barrels in the week ended June 10, according to market sources, citing American Petroleum Institute figures.
One 2500 ppm gasoil deal, no jet fuel trades. China’s refinery throughput in May fell 10.9% from the same month a year earlier in the steepest year-on-year drop in at least a decade, data showed on Wednesday, as strict COVID-19 lockdowns slammed fuel demand.