SINGAPORE: Asian refining margins for jet fuel slipped on Thursday due to soaring crude prices, while cash differentials for the aviation fuel inched down on muted demand in the physical market.

Refining margins, or cracks, for jet fuel dropped to $12.87 a barrel over Dubai crude during Asian trading hours, 29 cents lower from a day earlier.

The jet fuel market, however, remains buoyed by hopes of improving demand as countries lift border curbs and ease quarantine requirements.

The recovery would be primarily led by domestic routes as a majority of passengers still lack the confidence to plan international travel, trade sources said.

A recent reopening of Australia’s internal and external borders has significantly boosted the outlook for Qantas Airways, although the Omicron COVID-19 outbreak has set back its business recovery plans by around six months.

Cash premiums for jet fuel slipped to $1.14 a barrel to Singapore quotes, compared with $1.20 per barrel on Wednesday.

Singapore’s middle distillate inventories slipped 1.4% to 7.4 million barrels in the week to Feb. 23, according to Enterprise Singapore data.

Weekly Singapore middle distillate inventories have averaged about 7.8 million barrels so far this year, compared with an average of 11.8 million barrels in 2021, Reuters calculations showed. This week’s stocks were 52.6% lower than a year earlier.

US distillate inventories, which include diesel and heating oil, fell by 985,000 barrels in the week ended Feb. 18, according to market sources, citing American Petroleum Institute figures.

EDP Renewables (EDPR), the world’s fourth-largest renewable energy producer, said on Thursday it plans to invest up to S$10 billion ($7.40 billion) by 2030 to establish a clean energy hub in Singapore for the Asia Pacific region.

EDPR, which is 75% owned by Portugal’s biggest utility Energias de Portugal, closed a S$1 billion deal to acquire a 91% stake in Southeast Asian renewables firm Sunseap Group on Thursday.