Asian jet fuel refining margins fell for a third consecutive session on Monday, plunging to their weakest in more than three weeks as traders remained concerned it would take months for international aviation demand to pick up pace even as countries ease border restrictions.
Refining margins, also known as cracks, for jet fuel dropped to $12.87 a barrel over Dubai crude during Asian trading hours, the lowest since Jan. 26. They were at $13.49 per barrel on Friday.
Although the jet fuel market is expected to find support in the coming months, primarily from domestic routes, traders believe any major upside would likely be limited due to the ongoing restrictive measures on international travel in several countries.
“The headwind for jet fuel and aviation recovery is still about COVID, about quarantine, about PCR (polymerase chain reaction) tests… It involves more time, cost and planning,” a Singapore-based trader said.
“Aviation demand will depend mainly on and within the domestic markets,” she added. Cash premiums for jet fuel fell to $1.17 a barrel to Singapore quotes, down from $1.23 a barrel at the end of last week.
AUSTRALIA REOPENS BORDERS
Australia on Monday fully reopened its international borders to travellers vaccinated against the coronavirus after nearly two years of pandemic-related closings as tourists returned and hundreds of people were reunited with family and friends.
More than 50 international flights will reach the country through the day, including 27 touching down in Sydney, its largest city, as the tourism and hospitality sectors look to rebuild after getting hammered by COVID-19 restrictions.
TENDERS
Sri Lanka’s Ceylon Petroleum Corp (Ceypetco) is seeking a combined cargo of 150,000 barrels of 500 ppm gasoil and 160,000 barrels of jet fuel for delivery in Colombo over March 9-10 on a DAP basis. The tender closes on Feb. 22 and will remain valid for three days.
Ceypetco is also seeking another 280,000 barrels of 500 ppm gasoil for March 16-17 delivery on a DAP basis. The tender closes on Feb. 22 and will remain valid for three days.
SINGAPORE CASH DEALS
One 500 ppm gasoil deal, no jet fuel trades
OTHER NEWS
Oil prices rose slightly on Monday as fresh diplomatic efforts to resolve the Ukraine crisis provided some relief from supply concerns that have kept oil prices near $100 a barrel.
OPEC+ should stick to its current agreement to add 400,000 barrels of oil per day each month to output, ministers of Arab oil-producing countries said on Sunday as they gathered in Saudi Arabia, rejecting calls to pump more to ease pressure on prices.
Source: Reuters (Reporting by Koustav Samanta; Editing by Devika Syamnath)