Kero and Diesel
Market Overview
Kero
Prompt Singapore jet market feels reasonably well-supplied with the higher runrates and demand destruction in the region.
China jet export volumes were extremely weak in April whilst hearing increased volumes in May.
Cautious on Sg regrade, with China’s May export data being a key near-term catalyst. Disappointment would be bullish for regrade.
East Asian arbs very open into USWC.
Diesel
Singapore and Ulsan cash diffs have fallen to 2-3$/bbl, down from high single digits.
Middle distillate inventories remain elevated despite some drawdowns.
Major arb routes into Singapore closed whilst Asia remains well-supplied in the prompt.
High prices combined with the monsoon season could weigh on Indian diesel demand and keep E/W spread compressed.
