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Asia Distillates-Jet cracks weaken, front-month contango widens

SINGAPORE, Feb 23 (Reuters) – Asian jet fuel refining profits slipped for a second straight session on Tuesday as a recovery in aviation demand faces headwinds from prolonged international border restrictions and the slow pace of vaccinations in several markets. Refining margins, or cracks, for jet fuel slipped to $5.40 per barrel over Dubai crude during Asian trading hours, down from $5.51 per barrel a day earlier. Although jet fuel cracks have gained nearly 60% over the last month, they are at their weakest on record for this time of the year, Refinitiv Eikon data showed. Most traders and industry analysts believe passenger traffic will not see a substantial recovery before the second half of this year and then it will be primarily from domestic routes. The number of scheduled flights operating globally was about 376,000 in the week ended Monday, up by about 2,700 flights from a week earlier, but 42% below the number for the corresponding period a year ago, aviation data firm OAG found. Scheduled flight seats in Australia were down 56.4% year-on-year in the week to Feb. 22, a slight deterioration from a 53.6% drop in the previous week, while scheduled seats in India were 29.8% lower year-on-year, against a 29.2% drop last week, OAG data showed. Cash discounts for jet fuel <JET-SIN-DIF> remained unchanged at 25 cents per barrel to Singapore quotes on Tuesday, while the front-month time spread for the aviation fuel in Singapore widened its contango by 3 cents to trade at a discount of 24 cents per barrel. SINGAPORE CASH DEALS – Two gasoil deals, no jet fuel trades OTHER NEWS – Oil prices rose on Tuesday, underpinned by the likely easing of COVID-19 lockdowns around the world, positive economic forecasts and lower output as U.S. supplies were slow to return after a deep freeze in Texas shut down crude production. – India’s Reliance Industries Ltd expects to hive off its oil-to-chemicals (O2C) business into a 100% subsidiary in the September quarter, the company said on Tuesday, paving the way for a stake sale in the new company. ASSESSMENTS MID-DISTILLATES CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC Spot Gas Oil 0.5% 70.06 2.45 3.62 67.61 <GO-SIN> GO 0.5 Diff -1.64 0.02 -1.20 -1.66 <GO-SIN-DIF> Spot Gas Oil 0.25% 70.16 2.45 3.62 67.71 <GO25-SIN> GO 0.25 Diff -1.54 0.02 -1.28 -1.56 <GO25-SIN-DIF> Spot Gas Oil 0.05% 70.5 2.42 3.55 68.08 <GO005-SIN> GO 0.05 Diff -1.2 -0.01 0.84 -1.19 <GO005-SIN-DIF> Spot Gas Oil 0.001% 71.71 2.42 3.49 69.29 <GO10-SIN> GO 0.001 Diff 0.01 -0.01 -50.00 0.02 <GO10-SIN-DIF> Spot Jet/Kero 68.68 2.5 3.78 66.18 <JET-SIN> Jet/Kero Diff -0.25 0 0.00 -0.25 <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 Barbara Lewis)

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