06 Apr 2020 | 05:13 UTC — Singapore

Weekly outlook: Asia gasoil, jet fuel

Highlights

The Singapore balance April/May gasoil timespread opened Monday at minus $1.40/b, largely stable from Friday's close at minus $1.39/b.

The front-month April Exchange of Futures for Swaps spread was pegged at minus $12.27/mt, narrowing in from minus $14.01/mt at the 0830 GMT Asian close Friday.

Fundamentals for the Asian middle distillate product remained bearish for the week ahead, on a persistent regional supply glut due to curtailed demand.

Spot gasoil offers from India have been rising, a trend expected to continue with the country in its second week of lockdown.

Indian refiners such as Bharat Petroleum Corp., Indian Oil Corp. have issued spot gasoil sell tenders over the weekend with volumes totalling 182,000 mt, for loading over April. The tenders are to close later this week. That brings India's gasoil volumes for loading over April to around 862,000 mt, according to Platts' observations. For March-loading dates, India's offered gasoil volumes totaled 201,000 mt.

Results of a GS Caltex spot sell tender for medium sulfur gasoil is expected this week. The South Korean refiner closed its tender to sell five cargoes -- each 300,000 barrels -- of 500 ppm sulfur gasoil for loading in May from Yosu, last Friday.

Singapore — Asia's middle distillates market opened the week firmer, tracking gains in June ICE Brent crude futures, which rose despite OPEC postponing its webinar meeting to discuss potential output cuts to Thursday, from Monday as initially planned.

June ICE Brent crude futures were up $2.36/b (7.6%) from Friday's Asian settle of $30.91/b to stand at $33.27/b at 0300 GMT Monday.

Gasoil

Jet fuel/Kerosene

  • The Singapore jet fuel front month balance April/May timespread opened Monday at minus $3.05/b -- staying below the $3/b mark -- as demand was wiped out by the coronavirus pandemic.
  • With India under lockdown, industry sources noted that demand for jet fuel cargoes was near zero, adding that there are no flights in and out of the country.
  • Market participants expect rising jet fuel stocks amid the global lockdowns, leaving traders with little choice but to look for floating storage as land-based storage became scarce.
  • South Korea's jet fuel market is expected to remain bearish this week amid a supply glut in the region, capping exports from the country. Suppliers' hopes were further dashed when China Aviation Oil's buy tender for 30,000 mt jet fuel for loading over May 1-31 on a FOB South Korea basis, was heard to have been unawarded as sellers could not fulfil the tender criteria.
  • A sell tender issued by South Korea's GS Caltex to supply either two cargoes of 300,000 barrels or one cargo of 720,000-770,000 barrels of jet A-1 closed Friday. Results of the tender are expected this week.

Editor:

Barbara Lorenzo Caluag