Singapore distillate cracks firm on strong diesel demand

London, (Quantum Commodity Intelligence) - Asian middle distillate cracks versus cash Brent rose sharply on Monday, with those for 10ppm diesel increasing 40% and jet cracks turning positive, as strong demand for diesel in the cash markets flattened the contango structure in both the jet fuel and gasoil markets.

The spot 10ppm diesel crack FOB Singapore versus June cash Brent at 16:30 Singapore time rose to $3.35/b from $2.49/b on Friday with the contango flattening, while spot jet kero cracks turned positive – to $0.25/b from -$0.37/b on Friday.

Three cash deals were heard in the 10ppm market on Monday, increasing the cash differential to swaps from -$0.35/b to between flat and -$0.10/b.

The underlying swap values were $67.09/b for 10ppm and $63.99/b for jet-kero for 15-30 day delivery FOB Singapore, leaving the diesel-jet kero spread at a chunky $3.10/b.

Firming gasoil and jet cracks shrugged off a greater than expected build in US stocks last week and come as the vaccination programmes in both the US and the UK continue their momentum.

Positive tests in both countries are falling sharply, while the state of New York and the whole of the UK are set to trial vaccine status certificate schemes to help the hospitality sector regain trade.

June cash Brent was marked at $63.74/b.