Nov 22, 2021
Asian middle distillate markets started the Nov. 22-26 trading week on a steady to weaker note as firm demand and lean supply continues to support the gasoil sector, while uneven demand recovery continues to hamper demand in the jet fuel/kerosene arena.
At 10 am Singapore time (0200 GMT), the ICE January Brent crude oil futures contract stood at $78.29/b, down 60 cents/b (0.76%) from the Nov. 19 Asian close.
– Brokers pegged the December-January jet fuel/kerosene time spread at plus 6 cents/b at 0200 GMT Nov. 22, down 8 cents/b from the 0830 GMT Asian close Nov. 19, S&P Global Platts data showed.
– The FOB Singapore jet fuel/kerosene cash differential was assessed at plus 5 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments Nov. 19, down from plus 21 cents/b Nov. 15, Platts data showed.
– Market sentiment softened amid expectations of higher jet fuel exports from China in December, industry sources said. China’s Ministry of Commerce Nov. 10 approved the transfer of 969,000 mt of key oil product export quotas allocated to PetroChina, Sinopec and Sinochem from the processing trade route to the general trade route.
– However heating requirements during the Northern Hemisphere winter are expected to maintain a floor under jet fuel/kerosene prices, sources said.
– The Q1-Q2 2022 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged plus $1.36/b over Nov. 15-19, down from plus $1.93/b the week before.
– Brokers pegged the December-January gasoil market structure at plus 39 cents/b at 0200 GMT Nov. 22, down 26 cents/b from the 0830 GMT Asian close Nov. 19.
– The December Exchange of Futures for Swaps spread was pegged at minus $13.15/mt at 0200 GMT Nov. 22, narrowing from minus $17.10/mt at the Nov. 19 Asian close, Platts data showed.
– The near-term outlook for Asian gasoil markets was bullish, industry sources said, as trading activity gains pace with the easing of pandemic movement restrictions and rising vaccination rates, with many countries ramping up activity across the transportation, travel, manufacturing and industrial sectors.
– However some streams of supply were increasing availability in the market and there was some concern over pockets of rising coronavirus infections, isolated restrictions and suggestions of circuit breaker lockdowns being imposed should fatality rates reach critical numbers in the West, industry sources said.
– Singapore’s middle distillate stockpiles hovered at a near three-year low of 9.16 million barrels Nov. 11-17, Enterprise Singapore data released late Nov. 18 showed. The main trading hub in Asia remained a net gasoil exporter in the week at 490,253 mt, up 75% from the week before, mainly to Australia at 125,269 mt, Malaysia 50,213 mt and Ecuador 37,698 mt.
– The Q1-Q2 2022 gasoil swap spread averaged plus $1.65/b over Nov. 15-19, down from plus $2.13/b the week before.