Asia middle distillates: Key market indicators for Jan. 10-15

Asian middle distillates started the Jan. 10-14 trading week on a firmer note as market participants focused on expectations of leaner supplies and good demand.

At 10:00 am Singapore time (0200 GMT), the ICE March Brent crude oil futures contract was at $81.69/b, down 58 cents/b (0.70%) from the Jan. 7 Asian close.

Jet Fuel/Kerosene

** The Asian jet fuel/kerosene could see some support as market participants stayed focus on expectations of leaner supplies, snubbing headlines of surging infections due to the omicron variant.

** Brokers pegged balance month January-February jet fuel/kerosene time spread at plus 43 cents/b at 0200 GMT Jan. 10, widening 9 cents/b from plus 34 cents/b at 0430 GMT Asian close on Jan. 7, Platts data showed.

** The FOB Singapore jet fuel/kerosene cash differential was assessed at plus 8 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments on Jan. 7, up 6 cents/b in the span of just five trading days, Platts data showed.

** Japan's kerosene stocks dropped 5% week on week to 14.04 million barrels Jan. 1, according to the Petroleum Association of Japan data released on Jan. 6, as the country's heating demand picked up due to lower temperatures.

** The Q1-Q2 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged plus 76 cents/b over Jan. 3-7, down from plus 87 cents/b the week before.

Gasoil

** Traders expect sentiment in the Asian gasoil market to remain firm amid shorter supplies and healthy demand even as the market digested news of China's first batch of oil product exports quotas for 2022, that was released in the week of Jan. 3. The quotas decreased by more than 50% as compared with the same period a year ago, and this would point to lesser gasoil exports from the major exporter over the next few months.

** Brokers pegged balance month January-February Singapore gasoil at plus 77 cents/b at 0200 GMT Jan. 10, widening 2 cents/b from the 0430 GMT Asian close on Jan. 7.

** The January Exchange of Futures for Swaps spread was pegged at minus $10.27/mt at 0200 GMT Jan. 10, widening from minus $9.58/mt at the Jan. 7 close, Platts data showed.

** Singapore's middle distillate stocks rose 3.17% over Dec. 30-Jan. 5 to 8.15 million barrels, from 7.9 million barrels recorded the previous week, Enterprise Singapore data released late Jan. 6 showed. The rise in inventory, which snaps two weeks of decline, has come amid slower trading activity due to year-end festivities as well as closed East-West arbitrage lanes which has resulted in gasoil barrels still stuck in the region.

** The Q1-Q2 2022 gasoil swap spread averaged plus $1.33/b over Jan. 3-7, down from plus $1.57/b the week before.