SINGAPORE: Asian jet fuel refining margins rose for a fourth straight session on Thursday, but traders were concerned any further upside would be limited as several countries reimposed travel restrictions and flight bans to curb surging COVID-19 infections.
Refining margins or cracks for jet fuel jumped to $11.56 per barrel over Dubai crude during Asian trading hours, the strongest since Dec. 16. They were at $11.04 per barrel a day earlier.
Hong Kong said it would ban flights from eight countries for two weeks from Jan. 8, affecting Britain, the United States, Canada, Australia, Pakistan, Philippines, France and India. The northwestern Chinese city of Xian has suspended all international passenger flights from Jan. 5 at its airport until further notice.
Cash differentials for jet fuel flipped to a narrow premium of 5 cents per barrel to Singapore quotes on Thursday, compared with a discount of 12 cents per barrel on Wednesday.
The Jan/Feb time spread for the aviation fuel in Singapore narrowed its backwardation by 2 cents on Thursday to trade at 17 cents per barrel.
Singapore’s middle distillate inventories rose 3.2% to a six-week high of 8.1 million barrels in the week to Jan. 5, according to Enterprise Singapore data.
Weekly Singapore middle distillate inventories averaged 11.8 million barrels in 2021, compared with an average of 13.9 million barrels in 2020, Reuters calculations showed. This week’s stocks were 43.9% lower than a year earlier.
US distillate inventories, which include diesel and heating oil, rose by 4.4 million barrels in the week to Dec. 31, versus expectations for a 1.5 million-barrel rise, the Energy Information Administration said on Wednesday.
Malaysia plans to implement its nationwide adoption of the B20 palm oil biofuel programme by the end of 2022, the country’s palm oil board said on Wednesday. The mandate to manufacture biofuel with a 20% palm oil component - known as B20 - for the transport sector was first rolled out in January 2020 but faced delays due to movement curbs imposed to contain coronavirus outbreaks.
No jet fuel trades, no gasoil deals. Oil prices lost ground on Thursday, falling from their highest levels in more than a month after US fuel stockpiles surged amid declining demand.