Singapore—The Asian middle distillate complex is poised to remain steady in the week of May 10-14. In the gasoil sector, industry sources said leaner regional supplies due to refinery turnarounds will offset sluggish demand on the back of tightening COVID-19 restrictions, while the pandemic continues to hamper demand in the jet fuel/kerosene market.
Jet fuel/Kerosene**The balance-month May-June jet fuel/kerosene time spread narrowed 3 cents/b to plus 2 cents/b at 0245 GMT May 10, from plus 5 cents/b at the 0830 GMT Asian close on May 7, Platts data showed.
**The FOB Singapore jet fuel/kerosene cash differential was seen higher in the previous week, and was assessed at plus 10 cents/b to Mean of Platts Singapore jet fuel/kerosene assessments on May 7, marking a 29 cents/b jump week on week. The cash differential flipped into premium territory on May 3 and rose to a 14-month high of MOPS jet fuel/kerosene assessments plus 13 cents/b on May 5, Platts data showed.
**In India, jet fuel demand is expected to decline on rising COVID-19 infections. The US, UK, Singapore, Kuwait, Canada, France, Australia are just some of the counties that have recently banned flights from India, or imposed other restrictions, due to the unprecedented spike in COVID-19 cases in the country
**Singapore remained a net importer of aviation fuels and kerosene in the week ended May 5, with inflows, of which all were from Malaysia, totaled 24,203 mt. Meanwhile, outflows of aviation fuel and heating oil rose 16,806 week on week to 27,662 mt over the same period, with most of the exports headed for Guam at 12,639 mt.
**The Q3-Q4 jet fuel/kerosene swap spread -- an indication of near-term sentiment -- averaged minus 11 cents/b May 3-7, narrowing 14 cent/sb from the previous week's average of minus 25 cents/b.
Gasoil**Traders said sentiment in the Asian gasoil market during the week ending May 14 may likely remain mixed amid divergent views, as some sources expect leaner supply in the months ahead could lend support to the complex, while others voiced concerns over the pace of demand recovery as the COVID-19 pandemic worsens in Asia could put downward pressure on the market.
** As such, gasoil values could remain largely rangebound, with some industry sources saying that the market seems to be shuffling towards a more balanced state. This has been reflected in an overall steadiness in the Singapore derivative gasoil intermonth spreads, with the prompt and front month both flipping into a slight backwardation over the week of May 3-7, but falling back into a shallow contango structure shortly after.
**The balance May-June gasoil market structure was pegged at minus 5 cents/b at 0245 GMT May 10, widening 4 cents/b from the minus 1 cent/b assessed at the Asian close on May 7, Platts data showed.
**The balance-month May Exchange of Futures for Swaps, or EFS, spread was pegged at minus $4.62/mt at 0245 GMT May 10, marginally wider than the May 7 assessment of minus $4.29/mt, Platts data showed.
**The Q3-Q4 gasoil swap spread -- an indication of near-term sentiment -- averaged plus 35 cents/b May 3-7, widening plus 18 cents/b from the previous week's average of plus 17 cents/b.
