SINGAPORE, Nov 10 (Reuters) - Asia's November jet regrade, the relative strength of jet fuel prices versus gasoil, slipped on Friday but remained near multi-month highs seen in the previous session. The November jet regrade slipped to $1.51 a barrel on Friday, down from $1.58 a barrel on Thursday, its highest since May 2016, Reuters data showed. Recent weakness in an gasoil market, coupled with relatively stronger jet fuel prices, have helped boost the front-month regrade value, sources said.
REGRADE STRENGTH - "Singapore jet regrades surged over the past days, breaking above the five-year average for the first time since June to also stand at a (year-to-date) high," said JBC Energy in a research note on Friday. - This comes amid a cold snap in Japan, together with weather forecasts for below-average temperatures, which are likely boosting kerosene demand in the country at a time when the forward demand cover is roughly 20 days lower than the seasonal average, said JBC, citing the Petroleum Association of Japan. - "This is likely to support jet/kero cracks strength in Asia over the coming weeks and make the arb to Europe more difficult to work," said JBC.
ARA INVENTORIES - Gasoil and jet fuel stocks in the Amsterdam-Rotterdam-Antwerp (ARA) oil hub were slightly lower in the week to Nov. 9, PJK data showed. - ARA gasoil stocks slipped to 2.056 million tonnes, down 5 percent from the previous week and 30 percent lower from last year, the data showed. - Gasoil stocks slipped as demand for heating oil in Germany picked up, PJK's Patrick Kulsen said. - Jet fuel stocks were 4 percent lower from the previous week to 687,000 tonnes in the week to Nov. 9. Compared to last year, ARA jet fuel stocks are up 6 percent, the data showed. - Compared to last year, ARA fuel oil inventories are up 122 percent and are well above the five-year average of 895,000 tonnes for this time of year.
REFINING - South Korean refiners are planning to spend over $5 billion on plant upgrades in response to tighter rules on shipping fuel, boosting production of low-sulphur fuel oil as well as other high-end products. - The refiners hope the investment, which comes ahead of the 2020 introduction of the new rules, will make them one of the biggest beneficiaries of the new regulations, with many competitors still waiting to commit to new spending. - Wood Mackenzie analyst Suresh Sivanandam said the changed regulations would lead to a rise in demand for gasoil from the bunker sector and would push other refiners to look at investments or blending to meet demand.
- SINGAPORE CASH DEALS: One gasoil deal, no jet fuel trades. MID-DISTILLATES
CASH ($/T) ASIA CLOSE Change % Change Prev
Spot Gas Oil 0.5% 72.10 0.72 1.01
GO 0.5 Diff -1.51 0.02 -1.31
Spot Gas Oil 0.25% 72.39 0.72 1.00
GO 0.25 Diff -1.22 0.02 -1.61
Spot Gas Oil 0.05% 73.34 0.71 0.98
GO 0.05 Diff -0.27 0.01 -3.57
Spot Gas Oil 0.001% 74.59 0.72 0.97
GO 0.001 Diff 0.98 0.02 2.08
Spot Jet/Kero 75.08 0.62 0.83
Jet/Kero Diff -0.05 -0.02 66.67
For a list of derivatives prices, including margins, please double click the RICs below.
Jet Cracks M1
Jet Cracks M2
Crack LGO-Brent M1
Crack LGO-Brent M2
(Reporting by Roslan Khasawneh; Editing by Mark Potter)