<span id="midArticle_start"/>* Jet fuel cash differential hovers near 3-1/2-year low
<span id="midArticle_0"/>* Demand from Europe weak due to weak euro, high inventory
<span id="midArticle_1"/>* Storage could build or more jet fuel blended into gasoil
<span id="midArticle_2"/>By Jessica Jaganathan
<span id="midArticle_3"/>SINGAPORE, June 11 (Reuters) - Asia's jet fuel refiningprofits, which are down a quarter from their 2015 peak earlierthis year, are expected to weaken further as flight bookingsdrop due to an outbreak of a deadly respiratory disease in SouthKorea.
<span id="midArticle_4"/>Weak demand from Europe and high inventory had already beenweighing on aviation fuel margins, countering an expected risein passenger demand after lower jet fuel prices drove manyairlines to remove fuel surcharges.
<span id="midArticle_5"/> <span class="first-article-divide"/>"It's still too soon for MERS to have an impact but wheneverthere is an outbreak, jet fuel (prices) are usually affected," aSingapore-based trader said, referring to the Middle EastRespiratory Syndrome.
<span id="midArticle_6"/>Worry about the outbreak has spread from South Korea acrossthe region, with dozens of suspected cases being tested in HongKong, though none confirmed, and many thousands of trips toSouth Korea cancelled.
<span id="midArticle_7"/>Taiwan's two biggest airlines are temporarily cuttingflights to South Korea by nearly half, and Hong Kong's CathayPacific Airways Ltd said it had seen a drop inbookings to South Korea.
<span id="midArticle_8"/> <span class="second-article-divide"/>While the World Health Organisation (WHO) has notrecommended any curbs on travel or trade, some airline stockshave taken a hit. Shares of South Korea's Asiana Airlines, for instance, are down more than 10 percent sincethe start of the month, adding to losses that cam over theprevious two months as crude oil and jet fuel prices rebounded.
<span id="midArticle_9"/>With regional inventory set to build, traders expect jetfuel to go into storage or be blended into gasoil, whose demandas a power generation fuel is buoyed during summer.
<span id="midArticle_10"/> <span class="third-article-divide"/>The jet fuel cash differential on June 8 fell to its lowestsince December 2011, Reuters data showed, indicating that demandfor the fuel is failing to keep pace with supply. JET-SIN-DIF
<span id="midArticle_11"/>The arbitrage to ship the fuel from Asia to Europe is shutdue to a lack of demand from Europe as the weak euro takes itstoll, traders said. Higher freight rates are also keepingcargoes in Asia, one of them said.
<span id="midArticle_12"/>With European refiners capitalising on healthy profitmargins due to firm gasoline demand, inventory of jet fuel thereis also building, they said.
<span id="midArticle_13"/>China has also stepped up its jet fuel exports with Sinopecshipping its first cargo from the country to Gibraltar.
<span id="midArticle_14"/>Still, a 10 percent rise in Indonesia's jet fuel demandduring the Muslim fasting month of Ramadan, when many urbandwellers will fly home to see family, could stem some losses inmargins over the June-July period, traders said. (Reporting by Jessica Jaganathan; Editing by Tom Hogue)
<span id="midArticle_15"/>
<span id="midArticle_0"/>* Demand from Europe weak due to weak euro, high inventory
<span id="midArticle_1"/>* Storage could build or more jet fuel blended into gasoil
<span id="midArticle_2"/>By Jessica Jaganathan
<span id="midArticle_3"/>SINGAPORE, June 11 (Reuters) - Asia's jet fuel refiningprofits, which are down a quarter from their 2015 peak earlierthis year, are expected to weaken further as flight bookingsdrop due to an outbreak of a deadly respiratory disease in SouthKorea.
<span id="midArticle_4"/>Weak demand from Europe and high inventory had already beenweighing on aviation fuel margins, countering an expected risein passenger demand after lower jet fuel prices drove manyairlines to remove fuel surcharges.
<span id="midArticle_5"/> <span class="first-article-divide"/>"It's still too soon for MERS to have an impact but wheneverthere is an outbreak, jet fuel (prices) are usually affected," aSingapore-based trader said, referring to the Middle EastRespiratory Syndrome.
<span id="midArticle_6"/>Worry about the outbreak has spread from South Korea acrossthe region, with dozens of suspected cases being tested in HongKong, though none confirmed, and many thousands of trips toSouth Korea cancelled.
<span id="midArticle_7"/>Taiwan's two biggest airlines are temporarily cuttingflights to South Korea by nearly half, and Hong Kong's CathayPacific Airways Ltd said it had seen a drop inbookings to South Korea.
<span id="midArticle_8"/> <span class="second-article-divide"/>While the World Health Organisation (WHO) has notrecommended any curbs on travel or trade, some airline stockshave taken a hit. Shares of South Korea's Asiana Airlines, for instance, are down more than 10 percent sincethe start of the month, adding to losses that cam over theprevious two months as crude oil and jet fuel prices rebounded.
<span id="midArticle_9"/>With regional inventory set to build, traders expect jetfuel to go into storage or be blended into gasoil, whose demandas a power generation fuel is buoyed during summer.
<span id="midArticle_10"/> <span class="third-article-divide"/>The jet fuel cash differential on June 8 fell to its lowestsince December 2011, Reuters data showed, indicating that demandfor the fuel is failing to keep pace with supply. JET-SIN-DIF
<span id="midArticle_11"/>The arbitrage to ship the fuel from Asia to Europe is shutdue to a lack of demand from Europe as the weak euro takes itstoll, traders said. Higher freight rates are also keepingcargoes in Asia, one of them said.
<span id="midArticle_12"/>With European refiners capitalising on healthy profitmargins due to firm gasoline demand, inventory of jet fuel thereis also building, they said.
<span id="midArticle_13"/>China has also stepped up its jet fuel exports with Sinopecshipping its first cargo from the country to Gibraltar.
<span id="midArticle_14"/>Still, a 10 percent rise in Indonesia's jet fuel demandduring the Muslim fasting month of Ramadan, when many urbandwellers will fly home to see family, could stem some losses inmargins over the June-July period, traders said. (Reporting by Jessica Jaganathan; Editing by Tom Hogue)
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