Asian jet cracks near four-week low as Japan extends restrictions

London, (Quantum Commodity Intelligence) – Asian refining margins for jet kero neared a four week low in trade on Friday as Japan extended travel restrictions for another three-weeks in a bid to stem its latest Covid-19 outbreak.

The flat price of jet kero for loading in the next 15-30 days rose $0.95/b on the day to $72.35/b, but it lagged the rise in crude, leaving spot cracks versus July cash Brent at its lowest level since 3 May at $2.79 and its lowest ratio versus crude since late April.

The low comes on the same day that Japan's government extended travel restrictions that cover most of the country as new cases recorded climb above 4,000 a day after falling from a peak of above 6,000.

The US government has also issued an advisory against travel to Japan, as cases escalate just two months before the country is due to host the Olympics. 

Earlier this week, the International Air Transport Association estimated that air travel will be 52% of the 2019 pre-pandemic level and not returning to above that level until 2023.

Jet prices are caught between rising demand in the US, where seven-day averages for passenger numbers have climbed above 1.7 million per day for the first time in 14 months and in Asia, where demand in key economies Japan and India has collapsed.

Rising US demand is being met by higher run rates for crude, with the EIA stating refinery runs climbed 1 percentage point last week.

European cracks were also lower in early trade Friday at around $4.50/b, down from $5/b last week.

The east west spread was pegged at $10/mt, leaving the arb from Asia to Europe closed.