Asia middle distillates - Key market indicators this week

Singapore — The Asian middle distillates market started the week of Dec. 28 on a steady note, with gasoil and jet fuel/kerosene largely rangebound amid a seasonal lull ahead of year-end festivities.

The jet fuel/kerosene complex was supported amid heightened demand for heating kerosene, although this was offset by continual bearishness on the aviation front as many international airlines remain grounded due to the COVID-19 pandemic.

On the gasoil demand front, uncertainties arising from the pandemic continue to curtail refinery production as supply tightens even as some pockets of demand remain.

The front month February ICE Brent crude futures fell 52 cents/b to $51.16/b at 0300 GMT Dec. 28 from the 0430 GMT Asian close on Dec. 24.

JET FUEL/KEROSENE

** The front month January-February jet fuel/kerosene timespread was firmer at minus 22 cents/b 0300 GMT, narrowing 3 cents/b from the 0830 GMT Asian close on Dec. 24.

** The FOB Singapore jet fuel/kerosene cash differential gained in the week ended Dec. 24 amid firm demand for heating kerosene due to the colder winter climate in Northeast Asia, and was assessed at minus 8 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments on Dec. 24, narrowing 7 cents/b week on week, Platts data showed.

** The Q1/Q2 jet fuel/kerosene swap spread -- an indication of near-term sentiment -- closed Dec. 24 at minus 67 cents/b, down marginally from the Dec. 18 Friday close of minus 63 cents/b a week prior.

GASOIL

** The January-February gasoil market structure was pegged at parity at 0300 GMT, rolling over from the Asian close on Dec. 24, Platts data showed.

** The January Exchange of Futures for Swaps spread was pegged at plus 50 cents/mt at 0300 GMT, widening from plus 15 cents/mt at the Dec. 24 close.

** Industry sources said the Asian gasoil market is likely to remain steady to firm, with healthy regional demand seen supporting the complex.

** This came even as traders eyed higher inflows of gasoil to Asia from India and the Middle East, with around 460,000 mt of December-loading gasoil currently booked from those regions with options for Singapore discharge, according to shipping sources. This is up from the 450,000 mt that was loaded in November and landed in Southeast Asia, data from shipping sources and cFlow, Platts trade-flow software showed.

** The Q1/Q2 quarterly gasoil swap spread -- an indication of near-term sentiment -- averaged minus 35 cents/b for the week ended Dec. 24, just 2 cents/b up from the prior week's average of minus 37 cents/b.