Rising Demand Drives Jet Kerosene Prices in US and European Markets

The credibility account for the Jet Kerosene in the US and European market exponentially rose during July amid a feedstock Crude Oil supply cut, supporting the price trend to grow. Moreover, the recovery of air travel boosted the demand fundamentals of Jet Kerosene to showcase an uptrend.

As per the current data availability, the US has acknowledged a rebound of 14.4% to settle within 2.455 USD/gallon US Gulf Coast Kerosene-Type Jet Fuel spot price on a FOB basis during July after witnessing the significant surge in feedstock Crude Oil values. The actions taken by Russia and Saudi Arabia to cut oil production affected the downstream Jet kerosene price to remain high in the market. According to the Energy Information Administration, the US oil inventories fell by 2.3 million barrels, effectively contributing toward supply disruption. Hence, the tightening global oil market simultaneously affected the supplies of Jet Kerosene to put upward pressure on the prices. Moreover, the U.S. Federal Reserve planned to pause its interest rate hikes during July to promote economic activities, further surging the Jet Kerosene values and worldwide demand.

Despite the constant drop in airline ticket prices, sales continue to increase during July amid a rebound in air travel demand. Currently, the demand for aviation fuel is dominated by Jet Kerosene rather than SAF (Sustainable Aviation Fuels), which accounts for less than 0.1% of all aviation fuels consumed. Furthermore, China is recovering from its post covid economic slowdown. Hence, its intention of implementing economic incentives to promote growth affected the overall demand dynamics of the oil, including Jet Kerosene. The expected upcoming storm near Atlantic Basin tumbled the supplies of Jet Kerosene and accelerated the prices further. Likewise, refining margins are holding up well, thanks to strong gasoline cracks in the Atlantic Basin and rising demand for diesel, Jet Kerosene, and fuel oil.

As per ChemAnalyst, the future of the Jet Kerosene market is uncertain. The US market will likely remain bullish in the near term, as crude oil prices are expected to remain strong along with the increasing demand for European air travel. The recent tie-up of PM Modi with the Former-USCIRF commissioner might bring positivity to the aviation market of the US. However, the ultimate production of SAFs is still a point of discussion whether it would divert the prices of Jet Kerosene in a positive or negative direction, as the cost of producing alternative fuels is currently higher than the cost of producing petroleum-based jet fuel.