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Asia Distillates-Jet cash discounts narrow; market recovery still afar

SINGAPORE, July 6 (Reuters) – Asia’s cash discounts for jet fuel narrowed on Monday amid hopes for firmer aviation demand in coming months though traders remained worried the market would stay under pressure as long as international travel restrictions are in place. Cash differentials for jet fuel in Singapore <JET-SIN-DIF> were at a discount of 44 cents a barrel to Singapore quotes on Monday, compared with a 55-cent discount on Friday. Refining margins or cracks for jet fuel slipped to $1.79 a barrel over Dubai crude during Asian trading hours, compared with $1.91 per barrel on Friday. The jet cracks have gained over 10% in the last month, but they are still at their weakest seasonal levels on record for this time of the year, according to Refinitiv Eikon data that goes back to 2009. “Air traffic will recover in domestic and cargo first, and improvement in international travel will come much later,” said Sri Paravaikkarasu, director for Asia oil at consultancy FGE. “We assume Asian domestic jet fuel demand to return to year-ago levels by end of 2020 or beginning of 2021. However, international jet fuel consumption will still be below its end-2019 level at the end of 2021.” The regrade, which is the price spread between jet and gasoil, for August stood at a discount of $4.30 a barrel on Monday, prompting refiners to continue minimizing jet fuel production. Cash premiums for 10-ppm gasoil <GO10-SIN-DIF> were at 62 cents a barrel to Singapore quotes on Monday, down from 67 cents per barrel on Friday. SINGAPORE CASH DEALS – No gasoil deals, no jet fuel trades OTHER NEWS – Singapore’s High Court has appointed an independent supervisor to oversee the restructuring of trader Hontop Energy. – Global supply of fuel oil, used by ships and power plants, is expected to grow in the third quarter, depressing the marine fuel market as shipping demand remains weak, analysts and trade sources said. ASSESSMENTS MID-DISTILLATES CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Spot Gas Oil 0.5% 49.21 0.93 1.93 48.28 <GO-SIN> GO 0.5 Diff -0.83 -0.03 3.75 -0.80 <GO-SIN-DIF> Spot Gas Oil 0.25% 49.85 0.93 1.90 48.92 <GO25-SIN> GO 0.25 Diff -0.19 -0.03 18.75 -0.16 <GO25-SIN-DIF> Spot Gas Oil 0.05% 50.54 0.83 1.67 49.71 <GO005-SIN> GO 0.05 Diff 0.50 -0.13 -20.63 0.63 <GO005-SIN-DIF> Spot Gas Oil 0.001% 50.66 0.91 1.83 49.75 <GO10-SIN> GO 0.001 Diff 0.62 -0.05 -7.46 0.67 <GO10-SIN-DIF> Spot Jet/Kero 43.67 0.87 2.03 42.80 <JET-SIN> Jet/Kero Diff -0.44 0.11 -20.00 -0.55 <JET-SIN-DIF> For a list of derivatives prices, including margins, please double click the RICs below. Brent M1 Gasoil M1 Gasoil M1/M2 Gasoil M2 Regrade M1 Regrade M2 Jet M1 Jet M1/M2 Jet M2 Gasoil 500ppm-Dubai Cracks M1 Gasoil 500ppm-Dubai Cracks M2 Jet Cracks M1 Jet Cracks M2 East-West M1 East-West M2 LGO M1 LGO M1/M2 LGO M2 Crack LGO-Brent M1 Crack LGO-Brent M2 (Reporting by Koustav Samanta; editing by Emelia Sithole-Matarise)


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