Jet fuel prices in Asia surged to their highest level against gasoil in five years, reaching an 85 cents per barrel premium at the market's close, according to LSEG data. The increased demand for jet fuel, driven by winter heating and aviation needs, contributed to the widening re-grade spread. Refiners are inclined to produce more jet fuel, potentially tightening the supply of gasoil. China's reduction in exports, coupled with Europe and the United States pulling more jet fuel from Asia due to refinery outages, adds to the market dynamics. The winter heating oil demand and holiday travel season are further intensifying the market, with Asia supplying jet fuel to Europe and the U.S. The positive re-grade is also influenced by the increased use of kerosene in the production of European winter-grade diesel. Despite a narrow arbitrage window, jet fuel cargoes from Northeast Asia to northwest Europe are on the rise, while Middle East cargoes bound for Europe are declining. The arbitrage for Asia jet fuel to the U.S. West Coast is open, and traders are expected to ship cargoes promptly. Spot jet fuel cargoes from South Korean refiners have been sold at premiums due to arbitrage opportunities.

SOURCE: GOOGLE