SINGAPORE: Asia’s cash premiums for jet fuel slid to their lowest in nearly six weeks on Wednesday, weighed down by sluggish aviation demand as surging Omicron cases force airlines to cancel several flights across the globe.
Cash premiums for jet fuel plunged to 10 cents per barrel to Singapore quotes, the lowest since Nov. 18. They were at a 29-cent premium a day earlier. U.S carriers cancelled hundreds of flights on Tuesday due to adverse weather conditions and rising Omicron infections, while Hong Kong said it would tighten quarantine rules for air cargo crew. Refining profit margins for jet fuel dipped 7 cents to $11.02 per barrel over Dubai crude during Asian trading hours. Workers at Indonesia’s PT Pertamina have cancelled a planned 10-day national strike after their trade union and the state energy firm’s management agreed on labour terms, union president Arie Gumilar said in a statement on Wednesday.
The state energy company is Southeast Asia’s biggest fuel importer and at least 10,000 staff were initially slated to join the industrial action, according to media reports. Middle-distillate inventories in the Fujairah Oil Industry Zone inched up 0.3% to a two-week high of 2.1 million barrels in the week ended Dec. 27, data via S&P Global Platts showed.
The weekly stocks in Fujairah have averaged 3.5 million barrels this year, compared with 4.2 million barrels in 2020, Reuters calculations showed. US distillate inventories, which include diesel and heating oil, fell by 716,000 barrels in the week ended Dec. 24, according to market sources, citing American Petroleum Institute figures.
No gasoil deals, no jet fuel trades. US oil rose for a sixth consecutive session on Wednesday while Brent gained more ground with a broad-based rally in global markets supporting prices.
China’s commodities markets suffered through a turbulent year in 2021 as an energy crunch and subsequent government intervention roiled the prices of products from thermal coal to urea, whipsawing them from record highs to monthly lows in weeks. Still, the market is broadly set to end the year higher, notably tin, edible oils and thermal coal, though a second year of wild swings and sharp gains are unlikely amid expectations of more subdued economic growth.