Asia middle distillates - Key market indicators this week

Singapore — The Asian middle distillates market is expected to gain more ground in the week starting Nov. 23 on healthy kerosene demand, and as sentiment in the Asian gasoil market is expected to firm amid a gradual increase in demand while the supply balance remains tight.

ICE January Brent crude futures were up 77 cents/b at $44.41/b at 0300 GMT Nov. 23 from the 0830 GMT Asian close on Nov. 20.

JET FUEL/KEROSENE

** The jet fuel/kerosene market was slightly firmer in mid-morning trade Nov. 23 from the previous session, buoyed by firm demand for heating kerosene, industry sources said. Brokers

pegged the front month December-January jet fuel timespread at minus 33 cents/b at 0300 GMT, narrowing 1 cent/b from the 0830 GMT Asian close on Nov. 20.

** Refinery operations in Japan are normalizing as a result of healthy kerosene demand, coupled with the jet fuel market having recovered to about 40%-50% of its year-ago level as domestic flights resume, Petroleum Association of Japan President Tsutomu Sugimori said Nov. 20.

** Japan's estimated shipments of domestic kerosene jumped 66.5% in four weeks to 6.51 million barrels Nov. 14 from 3.91 million barrels in the previous four weeks to Oct. 17, according to calculations by S&P Global Platts based on PAJ data.

** The Asian aviation sector firmed in the week ended Nov. 20 amid heightened kerosene demand and a shortage of jet fuel supply, industry sources said. The FOB Singapore jet fuel/kerosene cash differential fell 32 cents/b week on week to minus 26 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments Nov. 20, Platts data showed.

** The FOB Singapore jet fuel/kerosene crack spread for physical cargoes against front-month cash Dubai also trended higher in the week, rising to plus $2.51/b Nov. 20, up $1.07/b from Nov. 13.

GASOIL

** The December-January gasoil market structure stood at minus 16 cents/b at 0300 GMT, widening slightly from minus 15 cents/b at the Asian close Nov. 20, Platts data showed.

** The December Exchange of Futures for Swaps spread was pegged at plus $3/mt at 0300 GMT, widening from plus $2.93/mt at the Asian close Nov. 20.

** The Asian gasoil market may firm in the week starting Nov. 23 amid expectations that China's gasoil exports would fall in December. China's December gasoil export volumes were estimated by industry participants at 1.1 million-1.2 million mt; Platts previously reported that Sinopec, PetroChina, CNOOC and Sinochem planned to export a combined 1.82 million mt of gasoil in November, 3.4% higher than the 1.76 million mt planned for October.

** The expectations of lower export volumes from China in December, ongoing refinery run cuts and steady to marginally firmer demand for gasoil in Southeast Asia could provide an uplift to the Asian gasoil market in the week starting Nov. 23, traders said.

** China's West Pacific Petrochemical Company was heard to have sold 40,000 mt of 50 ppm sulfur gasoil for loading from Dalian over Dec. 21-23 at a discount of around 90 cents/b to the Mean of Platts Singapore gasoil assessments, FOB. But this, as well as buyer details, could not be confirmed.