SINGAPORE: Asia’s cash premiums for jet fuel dipped on Wednesday, but stayed within close sight of a record high touched earlier this month on tight regional supplies and expectations of firmer aviation demand in coming months.
Cash premiums for jet fuel, which have nearly tripled in the last one month, were at a premium of $3.74 a barrel to Singapore quotes, compared with $3.86 per barrel a day earlier.
Although carriers in Asia have added capacity in recent weeks, the recent upsurge of coronavirus cases in the region’s biggest aviation market, China, weighed on demand recovery, trade sources said. “Given China’s zero COVID policy, we don’t expect a return to pre-pandemic air travel across the region (this year),” said Joseph Gatdula, head of oil and gas at Fitch Solutions.
“However, international travel to select destinations is likely to pick-up this year as those economies exit the Omicron wave and lift restrictions to support the tourism sector.” Refining profit margins for jet fuel rose $15.32 per barrel over Dubai crude during Asian trading hours, up from $13.51 per barrel on Tuesday.
US carriers said travel demand has roared back after a blip caused by the Omicron coronavirus variant and would remain strong enough to help them offset a run-up in fuel costs with higher fares.
Atlanta-based Delta Air Lines Inc said it was seeing an “unparalleled” increase in demand, resulting in the highest ticket sales in the company’s history last week. Rivals United Airlines Holdings and American Airlines also said the demand is higher than it has ever been. In an encouraging sign for the industry, United said business traffic is rebounding more quickly than expected.
Middle-distillate inventories in the Fujairah Oil Industry Zone rose 54.4% to a two-week high of 1.7 million barrels in the week ended March 14, data via S&P Global Platts showed. The weekly stocks in Fujairah have averaged 1.9 million barrels so far this year, compared with a weekly average of 3.5 million barrels in 2021, Reuters calculations showed. US distillate inventories, which include diesel and heating oil, rose by 888,000 barrels in the week ended March 11, according to market sources, citing American Petroleum Institute figures.
One gasoil deal, no jet fuel trades. Three million barrels per day (bpd) of Russian oil and products may not find their way to market beginning in April in the wake of its invasion of Ukraine, the International Energy Agency (IEA) said on Wednesday, as sanctions bite and buyers hold off. India’s gasoline and gasoil sales rose above pre-COVID levels of 2019 in the first half of March, preliminary data released on Wednesday showed, as consumers and dealers topped tanks ahead on likelihood of a fuel price hike after March 10.
Comments
Comments are closed.