|
The
premium for jet fuel cargoes in the Asian trading hub of
Singapore <JET-SIN-DIF> rose to as high as 38 cents a barrel
above benchmark quotes last week, taking the differentials to
their strongest levels for July-August since 2013. The premiums
were at 23 cents a barrel on Tuesday.
Asian refiners cut output during the second quarter as usual for
scheduled plant maintenance, while heavy demand for summer air
travel provided a seasonal boost to the region's
already-thriving aviation market, trade sources said.
"We had around 2.5 months of heavy (refinery) run cuts from May.
Runs were still recovering in July ... (and) refineries are not
likely to be on max runs until (later in) August," said Nevyn
Nah, an analyst at consulting firm Energy Aspects.
Lower runs at refineries in Europe and the United States also
helped to tighten jet fuel supplies, he said.
"The tightening of supplies in the second quarter prior to the
uptick in (air travel) demand in the third quarter means Europe,
for instance, is not going to get its re-supply from the East
until late-August."
(Graphic: Seasonal Singapore jet fuel differentials - https://tmsnrt.rs/2YpYZsi)
This has resulted in a supply-driven jet fuel market as demand
growth is taking a hit amid the increasing signs of a global
economic slowdown, traders and analysts said.
Most of the remaining summer air travel demand will come from
Europe and the United States as Asia's major festivals, such as
Ramadan, and its school holidays are over, said a
Singapore-based jet fuel trader.
"We also need to take note of the flight cancellations that are
happening in Hong Kong and ... the latest status on the
Japan-Korea relationship," she said, with both having at least a
short-term effect on jet demand.
More than 200 flights have been canceled in Hong Kong amid the
escalating anti-government protests in the Asian financial
center, while South Korea and Japan are currently in the middle
of a deepening trade dispute that is disrupting business ties.
The Asia-Pacific region accounts for about 37% of the global
aviation market. Its contribution has grown in recent years due
to expanding economic growth, new airports and terminals, cheap
fares and increased development of airlines' flight networks.
Asia-Pacific airlines carried 1.6 billion passengers in 2018, up
9.2% from the preceding year, the latest data from the
International Air Transport Association (IATA) showed last week.
(Reporting by Koustav Samanta; Editing by Tom Hogue)
[© 2019 Thomson Reuters. All rights
reserved.] Copyright 2019 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
