Despite weaker raw material crude prices, refining profit margins, or cracks, for jet fuel in Singapore slipped to $1.52 per barrel over Dubai crude during Asian trading hours.
They were at $1.55 per barrel a day earlier. The cracks found some support earlier this month as demand for closely-related heating oil kerosene picked up ahead of North Asia's winter, but industry analysts warned the margins would not fully recover until the coronavirus-hit aviation sector is back to normal.
"The COVID-19 pandemic continues to devastate the aviation industry. International traffic has all but disappeared — we are carrying only about 10% of normal levels," International Air Transport Association (IATA) Chief Executive Alexandre de Juniac (pic below) said in a statement on Tuesday.
"Domestic travel is picking up in some markets, but this is not enough to sustain the industry." Among Asian aviation markets hurt by the pandemic, scheduled flights in Malaysia were down 73.1% year-on-year in the week to Monday, compared with a 64.5% drop in the prior week, according to aviation data firm OAG.
Around 90% of all flights from Malaysian airports are for domestic routes, which have also fallen by 40% in the most recent week due to a resurgence in COVID-19 cases and new travel restrictions, OAG data showed.
The country's national airline, Malaysia Airlines, is struggling to make payments owed to creditors and lessors amid the pandemic, raising doubts about its survival.
Cash discounts for jet fuel were at 52 cents a barrel to Singapore quotes on Wednesday, compared with a 48-cent discount on Tuesday.
- Middle-distillate inventories in the Fujairah Oil Industry Zone rose 14.8% to 4.4 million barrels in the week ended Oct. 12, data via S&P Global Platts showed.
- The weekly stocks in Fujairah have averaged 3.9 million barrels so far in 2020, compared with the weekly average of 2.4 million barrels in 2019, Reuters calculations showed.- Reuters