Asia middle distillates: Key market indicators this week

Singapore — Sluggish regional demand, unviable East-West arbitrage economics and concerns over ballooning supply were the key factors expected to weigh on the Asian middle distillates complex in the week starting March 15, market participants said.

Jet fuel/kerosene

** The balance month March-April jet fuel/kerosene timespread was pegged at minus 42 cents/b at 11 am Singapore time (0300 GMT) March 15, widening from minus 38 cents/b at the 0830 GMT Asian close March 12.

** The FOB Singapore jet fuel/kerosene cash differential was assessed at minus 51 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments March 12, widening 20 cents/b week on week.

** Japan's kerosene stocks fell 9.9% week on week to 9.08 million barrels as of March 6, the Petroleum Association of Japan said March 10, as cold spells continued to boost heating oil demand in the country.

** Enterprise Singapore data showed that Singapore was a net importer of jet fuel, and imports rose to 32,763 mt in the week over March 4-10. The rise in imports was attributed to tepid demand from Europe -- a natural home for surplus jet fuel barrels from the Persian Gulf -- as aviation remained curtailed by the coronavirus pandemic.

** The Q2-Q3 quarterly jet fuel/kerosene swap spread -- an indication of near-term sentiment -- averaged minus 48 cents/b over March 8-12, down 16 cents/b from the previous week's average of minus 32 cents/b.

Gasoil

** The balance March-April gasoil market structure was pegged at minus 6 cents/b at 0300 GMT March 15, widening from plus 5 cents/b at the Asian close on March 12, S&P Global Platts data showed.

** The April Exchange of Futures for Swaps spread was pegged at minus $4/mt at 0300 GMT March 15, narrowing slightly from an assessed minus $4.54/mt at the March 12 close.

** Sentiment in the gasoil market has been trending lower on the back of ample supply due to healthy gasoil export volumes from China, as well as inflows into the region from India and the Persian Gulf.

** Some sources said the outlook for gasoil may pick up in the coming months amid leaner regional supply due to scheduled turnarounds in the region and continued low production volumes from North Asian supply centers.

** The Q2-Q3 quarterly gasoil swap spread -- an indication of near-term sentiment -- averaged plus 17 cents/b over March 8-12, down 24 cents/b from the previous week's average of plus 41 cents/b.