News: AIY Asia Distillates-Jet fuel cash discount narrows, cracks gain

SINGAPORE, Dec 3 (Reuters) - Asia's cash discounts for jet fuel narrowed on Thursday, buoyed by an uptick in buying interest for physical cargoes, while refining margins for the aviation fuel inched higher on weaker feedstock crude prices.

Cash differentials for jet fuel JET-SIN-DIF were at a discount of 20 cents a barrel to Singapore quotes, their narrowest since Nov. 10. They were at a discount of 25 cents per barrel a day earlier.

Refining margins, or cracks, for jet fuel JETSGCKMc1 rose 34 cents to $4.35 per barrel over Dubai crude during Asian trading hours, hitting the highest since March 30.

The cracks have strengthened in recent weeks, thanks to seasonal heating demand for kerosene, and firming aviation demand from domestic routes.

Australia's Qantas Airways (QAN) said on Thursday its outlook had improved significantly because the country had reopened its state borders, with rising domestic capacity allowing the airline to start the process of repairing its pandemic-hit balance sheet.

The jet profit margins, however, are still more than 70% lower than their historical average for this time of the year, Refinitiv Eikon data showed.

The jet fuel market, which has taken the worst hit from the virus, is expected to gradually recover in coming quarters as more grounded flights return to the skies, but it would still take years for the fundamentals to go back to pre-crisis levels, market watchers said.

The prompt-month time spread for the aviation fuel in Singapore JETSGSPDMc0 , which has been in a contango structure since March, traded at a discount of 41 cents per barrel on Thursday.

INVENTORIES

- Singapore's middle distillate inventories rose 3.1% to 15.9 million barrels in the week to Dec. 2, according to Enterprise Singapore data.

- Weekly Singapore middle distillate inventories have averaged about 13.7 million barrels so far in 2020, Reuters calculations showed. This week's stocks were 46.4% higher year-on-year.

- U.S. distillate stockpiles rose by 3.2 million barrels in the week to Nov. 27, versus expectations for a 209,000-barrel drop, the U.S. Energy Information Administration data showed on Wednesday.

SINGAPORE CASH DEALS - No jet fuel deals, no gasoil trades

OTHER NEWS - Oil prices fell on Thursday as producers including Saudi Arabia and Russia locked horns over the need to extend record production cuts set in place during the first wave of the COVID-19 pandemic.

ASSESSMENTS MID-DISTILLATES

 CASH ($/T)			 ASIA CLOSE	   Change   % Change   Prev Close   RIC 
 Spot Gas Oil 0.5%				51.70	 1.20	   2.38		50.50   GO-SIN  
 GO 0.5 Diff					  -1.31	 0.01	  -0.76		-1.32   GO-SIN-DIF  
 Spot Gas Oil 0.25%			   52.00	 1.20	   2.36		50.80   GO25-SIN  
 GO 0.25 Diff					 -1.01	 0.01	  -0.98		-1.02   GO25-SIN-DIF  
 Spot Gas Oil 0.05%			   52.15	 1.20	   2.36		50.95   GO005-SIN  
 GO 0.05 Diff					 -0.86	 0.01	  -1.15		-0.87   GO005-SIN-DIF  
 Spot Gas Oil 0.001%			  52.81	 1.22	   2.36		51.59   GO10-SIN  
 GO 0.001 Diff					-0.20	 0.03	 -13.04		-0.23   GO10-SIN-DIF  
 Spot Jet/Kero					51.38	 1.21	   2.41		50.17   JET-SIN  
 Jet/Kero Diff					-0.20	 0.05	 -20.00		-0.25   JET-SIN-DIF  
																						  
 For a list of derivatives prices, including margins, please double					   

click the RICs below. Brent M1 BRENTSGMc1 Gasoil M1 GOSGSWMc1 Gasoil M1/M2 GOSGSPDMc1 Gasoil M2 GOSGSWMc2 Regrade M1 JETREGSGMc1 Regrade M2 JETREGSGMc2 Jet M1 JETSGSWMc1 Jet M1/M2 JETSGSPDMc1 Jet M2 JETSGSWMc2 Gasoil 500ppm-Dubai GOSGCKMc1 Cracks M1 Gasoil 500ppm-Dubai GOSGCKMc2 Cracks M2 Jet Cracks M1 JETSGCKMc1 Jet Cracks M2 JETSGCKMc2 East-West M1 LGOAEFSMc1 East-West M2 LGOAEFSMc2 LGO M1 LGOAMc1 LGO M1/M2 LGOASPDMc1 LGO M2 LGOAMc2 Crack LGO-Brent M1 LGOACKMc1 Crack LGO-Brent M2 LGOACKMc2