Asia middle distillates: Key market indicators for June 21-25

Asian middle distillate markets are entering the June 21-25 trading week on a steady note, with gasoil demand expected to remain flat due to a lack of fresh pricing cues and jet fuel/kerosene continuing to grapple with a dearth of demand amid ongoing COVID-19 travel restrictions.

Jet fuel/Kerosene

** The front month July-August jet fuel/kerosene time spread was pegged at minus 27 cents/b at 0215 GMT June 21, widening 4 cents/b from Asian close June 18, S&P Global Platts data showed.

** The FOB Singapore jet fuel/kerosene cash differential remained in discount at minus 31 cents/b to Mean of Platts Singapore jet fuel/kerosene assessments June 18, albeit narrowing 3 cents/b week on week, Platts data showed.

** Japan's oil product exports rose 27.3% week on week to 1.75 million barrels in the week to June 12, even though jet fuel exports fell 20% to 404,082 barrels in the week, latest Petroleum Association of Japan data showed. Japan Airlines' domestic passenger numbers are estimated at 30% of pre-COVID-19 levels and international passenger are 5% of 2019, according to aviation data company Simple Flying.

** Singapore's jet fuel exports fell 82.57% week on week to 93,328 mt in the week to June 16, mainly to Bangladesh at 12,072 mt and the US at 4,191 mt, Enterprise Singapore data showed. Jet fuel imports fell to 2.76 mt from 15 mt the week before.

** The Q3-Q4 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged minus 25 cents/b over June 14-18, widening 12 cents/b from the week before.

Gasoil

** The front-month July-August gasoil market structure was pegged at plus 5 cents/b at 0215 GMT June 21, unchanged from the Asian close June 18, Platts data showed.

** The front-month July Exchange of Futures for Swaps or EFS spread was pegged at minus $3.75/mt at 0215 GMT June 21, narrowing from minus $4.17/mt at the previous Asian close, Platts data showed.

** The ultra low sulfur gasoil market was expected to remain steady in the week ahead amid stable regional demand and a leaner supply outlook, traders said.

** The middle sulfur gasoil market was under pressure from ample supply amid tepid demand. South Korean refiner GS Caltex has issued another spot sell tender for 500 ppm sulfur gasoil cargoes for loading from Yeosu in July, taking its total number of 300,000-barrel cargoes offered for July to nine, that closes June 21 with same-day validity.

** The Q3-Q4 gasoil swap spread, an indication of near-term sentiment, averaged plus 59 cents/b over June 14-18, narrowing 1 cent/b from the week before.