Spot product prices rose across the barrel in the week to June 21,as fundamentals improved in some markets and the futures benchmarks strengthened.Several products found support from weekly stockdraws,as well as the emergence of demand or the expectation of rising demand.Gasoil and jet fuel margins were buoyed by tightening inventories,as Singaporean stocks of middle distillates fell for the third straight week,settling at a five-week low.Although inventories have pulled back from lofty levels in recent weeks,the supply side was still assessed as fairly long,due to rising refining capacity and an overall bearish demand oudook.Despite the gloomy outlook,prompt demand for gasoil was firm,injecting some bullishness into an uncertain market as the US-China trade war takes its economic toll,while traders' optimism that summer jet fuel demand would be robust helped underpin prices and cracks for the aviation fuel.Cracks climbed to a six-year high for this time of year,due in part to a recent weakening of crude costs,but crude prices rallied during the second half of the period.Market players noted that jet fuel's contango structure has narrowed sharply in the past two weeks,indicating that the market could flip into backwardation,a sign that growing demand could underpin prompt prices.Some market watchers were looking beyond summer,pointing to a potentially strong autumn season for jet fuel.“Timespreads(for jet fuel)remain in contango on expectations of seasonal summer stockbuilds,which we expect to be comparable to those of last summer,” stated consultancy Energy Aspects.“Jet markets should be strong this autumn,supported by refinery maintenance and yield shifts towards diesel that will lead to steep jet-kero stockdraws in Oct.”
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