Global jet fuel markets are coming back to life, resuscitated by a rebound in air cargo demand, gradually recovering passenger traffic and hopes that COVID-19 vaccines will spur more international flights in 2021, Trend reports citing Reuters.
The pandemic brought air travel to a virtual halt this year, and analysts say it may take years before global appetite for jet fuel returns to pre-pandemic levels.
But refining profits for the fuel surged to multi-month highs in all key trading hubs in December on hopes of higher demand in 2021, with U.S. and European margins underpinned by a recovery in air cargo volumes and Asian margins also by a rebound in domestic travel and heating consumption.
Jet refining margins in Asia – the world’s top fuel market – have soared 580% and export prices by 45% since mid-September to their highest since March. Domestic air travel picked up as some countries eased coronavirus curbs.
“We expect vaccines will become available by (the) end of Q1 2021 and some travel restrictions will remain in place,” said Qiaoling Chen, research associate at consultancy Wood Mackenzie in Singapore, forecasting Asian jet fuel demand at 1.4 million barrels per day (bpd) in the first quarter of next year.
The consultancy expects appetite for jet fuel in the region to hit 1.3 million bpd in the fourth quarter of 2020, up by 460,000 bpd from Q2, but still 41% below the same period in 2019.