Asian middle distillate markets started the Sept. 27-Oct. 1 trading week on a steady to firmer note, as tight supply continues to lift sentiment for gasoil and jet fuel/kerosene.
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At 10:25 am Singapore time (0225 GMT), the ICE November Brent crude futures contract was up $1.12/b (1.43%) from the Sept. 24 close at $79.21/b.
** Brokers pegged October-November jet fuel/kerosene time spread at plus 17 cents/b at 0225 GMT Sept. 27, widening from plus 5 cents/b at the 0830 GMT Asian close Sept. 24, Platts data showed.
** FOB Singapore jet fuel/kerosene cash differential was assessed at plus 3 cents/b to the Mean of Platts Singapore jet fuel/kerosene assessments Sept. 24, rising 9 cents/b from the start of the week, Platts data showed.
** Overall optimism in downstream aviation sector continues to propel sentiment in the Asian jet fuel/kerosene market, traders said, with the product likely to see further support as demand gains momentum ahead of the seasonal heating requirements for the northern Hemisphere winter.
** Viable blending economics for jet fuel into the gasoil pool due to a widening regrade is set to further boost demand for the middle distillate. The front month regrade swap, which measures the price jet fuel commands over 10 ppm sulfur gasoil, widened to-date in September due to stronger gasoil demand. The regrade averaged minus $2.55/b compared with an average of minus $2.41/b in August.
** The Q4 2021-Q1 2022 jet fuel/kerosene swap spread, an indication of near-term sentiment, averaged 86 cents/b over Sept. 20-24 from plus 24 cent/b the week before.
** The October-November gasoil market structure was pegged at plus 55 cents/b at 0225 GMT Sept. 27, narrowing from the plus 58 cents/b assessed at the 0830 GMT Asian close Sept. 24, Platts data showed.
** The October Exchange of Futures for Swaps spread was pegged at minus $13.50/mt at 0225 GMT Sept. 27, largely steady from minus $12.64/mt at the Sept. 24 Asian close, Platts data showed.
** Traders said support for Asian benchmark 10 ppm sulfur gasoil grade has been growing due to leaner export volumes from major supply centers of Taiwan, Japan, South Korea and China for October. The supply crimp has come even as demand has been improving, with sources saying that Australia’s appetite for the fuel is expected to further improve.
** FOB Singapore 500 ppm sulfur gasoil remains in the doldrums, although some traders said the downward pressure has eased. The FOB Singapore 10-500 ppm sulfur gasoil spread has been hovering at multi-month highs for an extended period, and at the Asian close Sept. 24 the spread was assessed at $3.28/b, up a cent from the previous session.
** Singapore maintained its position as a net gasoil exporter with outflows at 506,528 mt in the week of Sept. 16-22, up 4.38% from the prior week, Enterprise Singapore data showed.
** The Q4 2021-Q1 2022 gasoil swap spread averaged plus $1.46/b over Sept. 20-24, compared with plus 99 cents/b the week before.