SINGAPORE: Asia’s cash premiums for jet fuel dipped on Friday, posting their first weekly decline in three, as fresh travel curbs due to the Omicron coronavirus variant in some countries dented aviation demand recovery.
Cash differentials for jet fuel were at a premium of 34 cents per barrel to Singapore quotes, down from a 40-cent premium a day earlier. The premiums have shed 29% this week.
“Earlier hopes of a wider recovery in the aviation market have unfortunately not been realized given the emergence of the Omicron variant, with the market now pinning their hopes on a Q1 2022 recovery instead,” Zameer Yusof, senior analyst at Refinitiv Oil Research said in a weekly note.
Refining margins or cracks for jet fuel, however, rose to $11.73 per barrel over Dubai crude during Asian trading hours, compared with $10.73 per barrel on Thursday.
CHINA AIR TRAFFIC
China’s domestic air traffic, once the world’s envy after a fast rebound during the pandemic, is faltering due to a zero-COVID-19 policy that has led to tighter travel rules in Beijing and weaker consumer confidence after repeated small outbreaks.
The outlook for the fourth quarter, normally a popular time for southerners to head north for winter breaks and northerners to head south for warmer weather, is dimming due to COVID-19 related disruptions at a time when international traffic is negligible.
Domestic capacity at the country’s three biggest airlines reached around 115% of pre-COVID levels in April but by October had fallen to around 77% due to outbreaks with lower peaks after each rebound, HSBC data shows. That contrasts with a steadier U.S. domestic recovery.
ARA INVENTORIES
Gasoil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose 6.3% to 1.9 million tonnes in the week ended Dec. 9, according to Dutch consultancy Insights Global.
ARA jet fuel inventories climbed 11.7% this week to 904,000 tonnes, due to high imports.
No jet fuel trades, no 10ppm gasoil deals
India’s fuel consumption fell in November after scaling a seven-month peak last month, government data showed on Thursday, as demand eased in the world’s third biggest oil consumer after festival season.