NEW YORK/LONDON/SINGAPORE (Reuters) - Prices and profit margins for motor and aviation fuels globally are under severe pressure from a plunge in demand as countries enforce lockdowns and airlines ground planes, forcing more refineries to reduce output.

FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. REUTERS/Angus Mordant/File Photo

U.S. ultra-low sulfur diesel was the latest product refined from crude oil to take a hit in its cash market last week, after refiners boosted production in a bid to escape the poorer margins for other products harder hit by coronavirus fallout.

Refining margins for gasoline and jet fuel have tanked because of decreased demand for transportation fuels, as the disease outbreak has forced businesses to close and governments to push residents to avoid travel and public places.

In Asia, profit margins for jet fuel turned negative for the first time in over a decade as global airlines canceled flights. Emirates and Singapore Airlines were the latest carriers to announce huge cuts in their passenger flights.

European jet fuel prices plummeted to a near 17-year low last week, and for the past eight trading sessions European refiners have been producing gasoline at a loss.

For most of last week, U.S. diesel margins held up relatively well as both trucking and farming, two sectors that rely on diesel, continued operating.

But refiners’ moves to divert production capacity previously devoted to other fuels to diesel is starting to cause oversupply in some regions, leading to a drop in cash prices, market participants said.

Cash prices for diesel in Chicago ULSD-DIFF-MC slid last week to 34 cents per gallon below the heating oil futures contract HOc1, the lowest seasonally since at least 2011, early Refinitiv Eikon data showed.

Elsewhere in the Midwest ULSD-DIFF-G3 and on the Gulf Coast ULSD-DIFF-USG, prices were the lowest seasonally since 2016.

That could augur declines in diesel refining margins HOc1-CLc1, which are still seasonally strong at $18.53 a barrel.

Meanwhile, gasoline refining margins RBc1-CLc1 are at $3.55 a barrel, the lowest for this time of year since at least 2005, Refinitiv Eikon showed.

REFINERIES CUT OUTPUT

Underscoring falling demand, Colonial Pipeline Co said on Thursday it would cut volumes on its primary lines delivering gasoline and diesel fuel to the U.S. East Coast from the Gulf Coast.

Refiners around the world have already started cutting output or are considering such measures as the coronavirus curbs travel and driving.

Exxon Mobil Corp XOM.N cut production at its 502,500 barrel per day (bpd) capacity refinery in Baton Rouge, Louisiana, on Saturday, according to sources familiar with plant operations.

Chevron Corp CVX.N also cut production at its 269,000 bpd California refinery to match decreased demand, sources said.

Delta Airlines is reducing production at its 190,000 bpd refinery in Trainer, Pennsylvania by 40,000 bpd, according to a source familiar with the matter.

In France, oil and gas major Total TOTF.PA said on Monday that it had postponed the restart of its 102,000 bpd Grandpuits refinery near Paris indefinitely.

Taiwan’s state-owned oil refiner CPC Corp will cut crude throughput rates in April by less than 10% from around 70%-80% currently, two sources said.