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.

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Cash discounts for jet fuel were at $1.19 a barrel to Singapore quotes on Wednesday, compared with a discount of $1.20 a barrel on Friday. Singapore oil markets were closed on Dec. 24-25.

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.