Asia middle-distillate round up: Cracks rise for the third week

Quantum Commodity Intelligence – Diesel and jet cracks rose for the third successive week in the week ending July 23rd as air travel demand starts to return to southeast Asia and narrows the regrade.

Diesel cracks for 10ppm rose from $5.65/b to $5.81/b FOB Singapore, while jet cracks rose from $2.97/b to $3.39/b, according to Quantum data.

Diesel prices rose $0.11/b over the course of the week and were assessed at $79.35/b on Friday.

Meanwhile, jet prices have risen from $76.56/b to $76.93/b, narrowing the regrade from -$2.68/b to -$2.42/b FOB Singapore

Jet cracks have now added $1.10/b since the start of the month, while diesel has risen $0.75/b.

With the east-west widening slightly over the week, there is a pull of jet into Europe that is providing some underlying strength.

While middle distillate stocks have flatlined in Singapore, the global diesel surplus has kept cracks from recovering while more and more seats are being offered in Southeast Asia as the region's air travel improves, albeit from a low base.

The number of airline seats on offer globally broke 80 million a week for the first time last week, although that remains 30% down on the 119 million that was being offered in the same week in July 2019, according to industry analysts OAG.

However, much of last week's growth has come from the Asia region, the analysts said, where seats on offer in Southeast Asia rose 21.6% on the week, from 2.35 million seats in the week ending 12 July to 2.87 million seats in the week ending 19 July – a rise of 500,000 seats.