Asian jet fuel prices slide 14% on day to 4-year low as coronavirus measures ground flights

Singapore — Benchmark FOB Singapore jet fuel/kerosene hit a four-year low at $36.60/b at the Asian close Monday amid the continuing demand destruction and supply glut caused by the global spread of coronavirus.

The FOB Singapore jet fuel/kerosene outright flat price was assessed down 13.6% from last Friday at $36.60/b at the Asian close Monday, the lowest since January 26, 2016, when it was assessed at $34.71/b, S&P Global Platts data showed.

The outright price has tumbled 54.4% to date in 2020 from $82.28/b on January 2, Platts data showed.

The coronavirus pandemic has sparked global flight cancellations and travel restrictions across dozens of countries.

"On top of simultaneous supply and demand shocks, the market continues to move linearly as reports of global containment measures and more travel restrictions roll in. All of which suggest rallies will fade," global chief markets strategist at AxiCorp, Stephen Innes, said in a note Tuesday.

Among the latest announcements, Malaysia's Prime Minister Muhyiddin Yassin announced a partial lockdown late Monday that bars citizens from leaving the country from March 18 until March 31.

"Everyone is suffering from the loss of demand [due to the coronavirus]... there are excess [jet fuel] cargoes and freight is high now," a trader said.

Reflecting the weakness, FOB Singapore cash differentials have remained negative to date in March and were assessed at minus 17 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments Monday, down 8 cents/b from last Friday, in the continuing absence of buying interest.

In the derivatives market, the contango structure in the front month April/May Singapore jet fuel/kerosene timespread widened for the third consecutive trading session to minus 79 cents/b at the Asian close Monday. It was last lower on January 25 at minus 84 cents/b, Platts data showed.