The jet fuel cracks have nearly doubled over the last month as demand for kerosene picked up ahead of peak winter in Japan and South Korea. Jet fuel and kerosene belong to the same grade of oil products, with jet margins determining the profitability of both. Although the regional jet fuel market has found some support in recent weeks from a sluggish recovery in domestic aviation demand, market watchers believe any substantial upside would remain capped as long as international flights do not take off in serious numbers.

Scheduled flights operating globally were 46% lower in November year-on-year, an improvement from 46.4% fewer flights year-on-year in October, according to aviation data firm OAG. Scheduled flights in India were down 39.4% year-on-year in the week to Monday, compared with a 43.9% drop for the whole of November. Flights in Japan in the week to Monday were 33.4% lower from the corresponding period last year, as against a 36% drop for the whole of November, OAG data showed. Cash differentials for jet fuel <JET-SIN-DIF> were at a discount of 27 cents a barrel to Singapore quotes on Tuesday, compared with a discount of 26 cents per barrel a day earlier.