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Oil traders ramp up Asian jet fuel exports to U.S., Europe

    * Asia to West jet fuel exports up 32% in April-May vs Feb-March
    * Aramco Trading, Shell, Chevron among charterers moving the fuel
    * Jet fuel cracks have gained 188% since March-end
    * Asia-U.S. arbitrage stronger than Asia-Europe - analysts

    By Koustav Samanta
    June 4 (Reuters) - Global oil trading companies are ramping up jet fuel exports from Asia to
Europe and the United States, as widespread anti-coronavirus vaccinations and relatively lower
infection rates allow commercial travel to resume faster in Western countries.
    The strong demand from the West has fully drawn down surplus jet fuel stored on ships around
Singapore, while refiners' margins for the aviation fuel - a big drag on overall profits during
the COVID-19 pandemic - have nearly trebled since end-March. 
    Asia exported about 417,000 barrels per day (bpd) of jet fuel to Europe and North America
combined in April-May, nearly 32% higher than 316,000 bpd for February-March period, according
to Reuters calculations based on data from oil analytics firm Vortexa.
    Jet fuel volumes in floating storage facilities have consistently stayed at zero for the
past four weeks for the first time since March last year, according to data intelligence firm
Kpler.
    There were about 313,000 barrels of jet fuel stored in ships in early May, already 90% lower
compared with the same time last year, Kpler data showed. 
    At least 10 vessels, chartered by companies including Saudi's Aramco Trading, Royal Dutch
Shell, Chevron Corp and Valero are currently in transit from South Korea
to the United States, ship tracking data showed, carrying about 3.3 million barrels of jet fuel
for delivery this month.
    "A pick-up in air travel in the U.S. and Europe amid falling (coronavirus) infection rates
and possible relaxing of travel restrictions this summer, that contrasts against the weak
fundamentals in Asia, is expected to support a widening of East-West jet fuel arbitrage in the
near term," said Serena Huang, Asia lead analyst at Vortexa.
    But the strength of the East-West arbitrage is also dependent on the inventory levels in the
United States and Europe, which suggests the Asia-U.S. arbitrage would be stronger in the near
term than the Asia-Europe arbitrage, analysts said.
    "U.S. jet stockpiles in May are on par with 2019 pre-pandemic average levels as per Energy
Information Administration data, but Amsterdam-Rotterdam-Antwerp's (ARA) jet stockpiles are
still above pre-pandemic levels," analyst Huang said.
    However, volumes to Europe are expected to gradually increase as further re-opening of
European markets for travel in coming days is expected to stimulate demand.
    "I think there is scope for that jet arbitrage volume to increase as Europe starts to open
up and passengers begin to fly again," said Kevin Wright, Kpler's lead analyst for Asia Pacific.
    Aviation demand outlook in Asia remains bleak as most countries continue to the battle new
waves of the pandemic. Some analysts believe it might take well into 2022 for the region, except
China, to witness any substantial recovery.
    
  Ships carrying jet fuel from South Korea to United States for June delivery:  
 VESSEL NAME          CHARTERER    ORIGIN PORT              QUANTITY (bbl)  DESTINATION PORT
 TORM FREYA           IDEMITSU     Yeosu (Yosu), Gwangyang         298,262  Honolulu, HI 
 MARLIN MILLENNIA     Shell        Ulsan, Onsan                    256,296  Honolulu, HI 
 REDWOOD MARINER ST   NA           Ulsan, Onsan                    291,620  Port Of Anchorage 
 TORM ALMENA          NA           Yeosu (Yosu), Gwangyang         255,636  Honolulu, HI 
 CHALLENGE PHOENIX    CASTLETON    Daesan                          287,582  Los Angeles, CA 
 SUNDA                ATC          Yeosu (Yosu), Gwangyang         341,183  Los Angeles, CA 
 SUNDA                ATC          Ulsan, Onsan                    255,611  Los Angeles, CA 
 BLUE GRASS MARINER   CHEVRON      Yeosu (Yosu), Gwangyang         319,886  Homer 
 TORM SOFIA           NA           Ulsan, Onsan                    419,529  Barbers
                                                                            Point-Honolulu, HI 
 ATLANTIC STAR        NA           Yeosu (Yosu), Gwangyang         312,439  Los Angeles, CA 
 ENERGY ARIADNE       Valero       Daesan                          221,891  Port Everglades, FL
 Source: Vortexa. NA - Not available.
 
 (Reporting by Koustav Samanta; Editing by Florence Tan and Kenneth Maxwell)
  
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