SINGAPORE (Reuters) - Asia's cash discounts for jet fuel narrowed by a cent on Wednesday but remained near this year's weakest levels of cash differentials amid a lingering supply glut, while the front-month spread shrunk its contango structure.

Jet fuel cash differentials will probably remain more or less static around current levels at least for a couple of weeks unless some unplanned refinery outages impact immediate supply, trade sources said.

The January/February time spread narrowed to 42 cents a barrel on Wednesday, compared with 44 cents per barrel on Friday.

A market structure where prompt prices are lower than those for future delivery, called as contango, tends to encourage holders of physical barrels to store the product and sell it later to secure higher prices.

The regional market for jet fuel or its closely-related kerosene, which is used for winter heating, has not benefited from the usual seasonal demand during the fourth quarter due to warmer-than-normal temperatures so far this year.

Winter kerosene demand, though much later than normal, has started to pick up sightly, traders said.

Jet fuel refining margins dipped to $15.45 a barrel over Dubai crude during Asian trading hours on Wednesday from $15.58 a barrel on Friday. Jet fuel and kerosene belong to the same grade of oil products with jet margins determining the profitability of both.

"A widespread cool-down is likely across China through the next 10 days, barring the Northeast which will be near normal. All other regions will be between 1-3 degrees Celsius below normal during the same period," Ed Whalen of Thomson Reuters Weather Research said in a report on Tuesday.

Temperatures in Tokyo, Beijing and Seoul are expected to stay mostly below normal next week, weather data and forecasts from Refinitiv Eikon showed.

Cash discounts for gasoil with 10ppm sulphur content were at 98 cents a barrel to Singapore quotes on Wednesday, the widest since Singapore's benchmark was shifted to 10ppm gasoil in January this year from 500ppm gasoil previously. They were at a discount of 95 cents a barrel on Friday.

Benchmark gasoil refining margins fell to $13.92 a barrel over Dubai crude, down from $14.14 a barrel on Friday.

FUJAIRAH STOCKS

- Middle distillate inventories in the Fujairah Oil Industry Zone (FOIZ) slipped 1.2 percent from a week ago to 1.6 million barrels in the week to Dec. 24, data via S&P Global Platts showed. [FUJAIRAH/]

- Since the start of the year, middle distillate inventories in the Fujairah oil hub have averaged 2.8 million barrels a week, compared with a weekly average of about 3.3 million barrels in 2017, Reuters calculations showed.

- Compared with year-ago levels, weekly Fujairah middle distillate inventories were 14 percent lower.

SINGAPORE CASH DEALS

- No gasoil deals, no jet fuel trades.

- For more information, please click [O/AS]

OTHER NEWS

- Royal Dutch Shell said on Wednesday it had begun output at its Prelude floating liquefied natural gas (FLNG) facility in Australia. It is the world's largest floating production structure and the last of a wave of eight LNG projects built in the country over the last decade.

Though the project started up later and cost more than originally estimated, it is expected to further cement Australia's lead as the world's biggest LNG exporter, after the country took the crown in November.

- Oil prices were mixed on Wednesday as the U.S. benchmark rebounded from steep losses in the previous session, even though concern over the health of the global economy continued to overshadow the market. [O/R]

- Russian Energy Minister Alexander Novak said on Tuesday that oil prices, which fell by more than a third this quarter, would become more stable in the first half of 2019.

ASSESSMENTS

MID-DISTILLATES

CASH ($/T) ASIA CLOSE Change % Change Prev Close RIC

Spot Gas Oil 0.5% 59.56 -4.45 -6.95 64.01

GO 0.5 Diff -3.40 -0.20 6.25 -3.20

Spot Gas Oil 0.25% 59.76 -4.45 -6.93 64.21

GO 0.25 Diff -3.20 -0.20 6.67 -3.00

Spot Gas Oil 0.05% 60.36 -4.45 -6.87 64.81

GO 0.05 Diff -2.60 -0.20 8.33 -2.40

Spot Gas Oil 0.001% 61.97 -4.29 -6.47 66.26

GO 0.001 Diff -0.98 -0.03 3.16 -0.95

Spot Jet/Kero 63.28 -4.22 -6.25 67.50

Jet/Kero Diff -1.19 0.01 -0.83 -1.20

For a list of derivatives prices, including margins, please

double click the RICs below.

Brent M1

Gasoil M1

Gasoil M1/M2

Gasoil M2

Regrade M1

Regrade M2

Jet M1

Jet M1/M2

Jet M2

Gasoil 500ppm-Dubai

Cracks M1

Gasoil 500ppm-Dubai

Cracks M2

Jet Cracks M1

Jet Cracks M2

East-West M1

East-West M2

LGO M1

LGO M1/M2

LGO M2

Crack LGO-Brent M1

Crack LGO-Brent M2

(Reporting by Koustav Samanta; Editing by Mark Heinrich)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)