Singapore jet fuel/kero breaches $100/b, first time in more than 7 years

FOB Singapore jet fuel/kerosene cargo breached the psychologically important $100/b mark for the first time in more than seven years at the Asian close Jan. 18, as a confluence of lean supplies and seasonal heating demand in Northeast Asia lent support.

At the 0830 GMT Asian close Jan. 18, Platts assessed FOB Singapore jet fuel/kerosene cargo at $100.31/b, up $1.83/b on the day. This represented a 15.96% gain since the start of the month. The assessment last breached $100/b on Nov. 10, 2014, when it was assessed at $101.44/b, Platts data showed.

Market participants reiterated the strength in the Asian jet fuel complex comes amid tighter supply, which has shored up the market to multi-year highs.

The physical FOB Singapore jet fuel/kerosene crack spread against front month cash Dubai -- a measure of the product's relative strength to crude -- has been on an upswing, indicating that the gain in product prices have been outpacing that of crude.

At the Asian close Jan. 18, the physical jet fuel/kerosene crack against front month cash Dubai crude was assessed at $13.76/b, up 18 cents/b from the previous session.

Month-to-date, the FOB Singapore jet fuel crack against front month cash Dubai averaged $11.76/b, Platts data showed, up $1.43/b from December 2021, and up $8.53/b, or 264%, from an average of $3.23/b in January 2021.

Asian jet fuel market sentiment remains mixed and possibly slightly bullish despite Platts reporting last week that China's oil companies are likely to ship at least 1.14 million mt of jet fuel in January, up from an estimated 720,000 mt in December.

This, traders said, was evidenced by spot jet fuel tenders issued by suppliers such as Taiwan's Formosa Petrochemical Corp. and South Korea's GS Caltex still "managing to achieve high prices", the traders said.

Platts previously reported that South Korea's GS Caltex sold a 300,000-barrel cargo of jet A-1 fuel for loading from Yeosu over Feb. 24-26 to an unknown buyer at a premium of 70-80 cents/b to Mean of Platts Singapore jet fuel/kerosene assessments, FOB, while Taiwan's Formosa was heard to have sold jet fuel at a premium of around plus 85 cents/b to MOPS jet fuel/kerosene assessments, FOB.

Meanwhile, seasonal heating demand continued to drive sentiment. Japan's kerosene stocks fell 4.2% week on week to 13.45 million barrels as of Jan. 8, according to the Petroleum Association of Japan data released Jan. 13, as cold weather boosted heating demand.

Reflecting the bullishness, the February-March jet fuel intermonth spread rose to a near 9-year high on Jan. 18 when it was assessed at plus $1.30/b, rising more than threefold since the start of the month when it stood at plus 31 cents/b. The spread was last assessed higher at $1.39/b on Feb. 13, 2013, Platts data showed.