* Regrade hits lowest on March 12 since 2015 - S&P Global Platts
* Travel curbs severely dent airline demand for fuel
* Jet fuel margin sees largest fall in a day since 2009 (Adds with U.S. market information, commentary)
SINGAPORE, March 13 (Reuters) - Refiners may curtail jet fuel output by partially reducing processing as the fuel's value versus diesel plunged after the United States said it would ban European travellers to prevent the spread of the coronavirus.
The regrade, which is the price difference between jet fuel and diesel with a sulphur content of 10 parts-per-million (ppm), fell to a discount of $3.86 a barrel on Thursday, the lowest since Aug. 13, 2015, according to data from S&P Global Platts.
U.S. President Donald Trump on Wednesday banned travel from 26 European countries for 30 days. On the same day, India said it will suspend the granting of visas to travel to the country.
As a result of the U.S. ban, jet fuel demand may drop by between 200,000 and 250,000 barrels per day, split between the U.S. and European markets over the 30-day ban, said Mark Williams, principal analyst, refining, at Wood Mackenzie.
"Refiners are also likely to lower jet yields and blend more jet fuel into the distillate pool to accommodate lower jet demand, adding further pressure to already weak distillate cracks," he said.
Refiners may deal with the lower jet fuel value by cutting their processing runs to make less of the fuel, which is typically produced during the initial distillation of crude into products.
Some U.S.-based traders expect the country's refiners to try to blend jet fuel into the diesel pool to try to make up for weaker jet demand.
"I am sure that they are already doing as much as they can to reduce jet production," a U.S.-based market participant said.
U.S. Gulf Coast jet fuel cash prices fell to 20.25 cents a gallon below heating oil futures on the New York Mercantile Exchange this week, traders said. That is the lowest for this time of year since at least 2004, the earliest data available, Refinitiv Eikon data showed.
Companies have already been cutting rates to deal with surplus aviation fuel because airline travel has declined as countries ban travel to halt the coronavirus spread.
"This (the U.S. travel ban) is the end of jet (fuel) market and there will likely have to be run cuts from Europe," said a source from a South Korean refinery.
"This will have a spillover effect into Asian markets and refiners will likely have to consider run cuts," he added.
Jet fuel typically cannot be stored for long periods as its quality could degrade, increasing the incentive for refiners to produce less of the fuel.
Jet fuel in Singapore was at $40.97 a barrel, down 49% this year, while 10ppm diesel was at $44.82, down 45%, according to Refinitiv data. <JET-SIN> <GO10-SIN>.
The crack margin for jet fuel versus Dubai crude oil fell 31% to $7.09 a barrel on Thursday, the biggest single-day percentage loss since Refinitiv began publishing the data.
(Reporting by Jessica Jaganathan and Seng Li Peng in Singapore and Stephanie Kelly in New York Editing by Christian Schmollinger and Matthew Lewis)