For the Quarter Ending March 2022
North America
Jet Kerosene prices witnessed an upward trajectory on the back of high upstream crude oil prices owing to the ongoing war between Russia and Ukraine during the first quarter of 2022. Limited supply of Jet Kerosene because of unexpected refinery outage in the Exxon’s Bayfield facility in December 2021. Jet kerosene was in high demand in the downstream airline industries, American airlines CEO Doug Parked stated that the industry has hit a one-day record high revenue, during Q1 of 2022. In fact, they had two days with 15% of higher revenues as compared to any previous days contributing to the upward price trend of jet kerosene in the American market. Jet Kerosene prices in the USA increased by over 6% in Q1 2022.
Asia Pacific
Jet Kerosene prices in the Indian market were recorded at USD 776/MT in March 2022. Jet Kerosene prices have been on a rise ever since the downstream aviation sector returned to their full operation increasing the demand for Aviation Turbine Fuel (ATF). High prices of the upstream Crude oil due to the ongoing war between Russia and Ukraine elevated Jet Kerosene values. One of the Airline executives stated that the booking in domestic air travel for leisure has been on a rise in India this quarter abetting the increase in demand of Jet kerosene in the domestic market.
Europe
Prices of jet kerosene in the European market was on an upward track and rising on the back of high upstream crude oil and natural gas prices on account of Russian-Ukraine war. The price hike in the European market is subtle as compared to other markets as the downstream airline industry suffered from low activity owing to the conflict in the East European region during the first quarter of 2022. Despite relatively lower demand the price was an upward trend owing to the disrupted trade of upstream crude oil due to the ban on imports of Russian crude and oil by various European countries. Jet Kerosine prices in Europe increased by nearly 3% in Q1 2022.
For the Quarter Ending December 2021
North America
The US Jet Kerosene prices were higher during Q4 of FY21 compared to the previous quarter owing to higher upstream crude prices. The prices for Q4 were on an average 15% higher than the Q3 levels. The average prices hovered around USD 2.14/Gallon assessed on an FOB US Gulf basis. The prices reached an annual high of USD 2.31/Gallon by the second week of October but then slowly tapered off due to fading demand by the end of December. Unplanned refinery outages during the month of December like Exxon’s Baytown facility will likely thwart supply for the first quarter of FY22. The spot export prices are set to rebound in the new year too as supply side shortages combined with increased demand from Europe could help boost the US side of the arbitrage in the coming weeks. Refiner margins may not improve by much during Q1 of FY22 as WTI crude prices are expected to rise sharply during the peak winter season as demand for heating fuel increases. Demand from the Aviation sector may improve if the pandemic does not play spoil sport.
Asia
Asian Jet Fuel demand picked up by mid-November FY21 as cash premiums improved to 45 cents/b on an FOB Singapore basis, almost triple the value at the start of the month indicating increased activity from the aviation sector. The cash differential increased to as high as 75 cents/b by the third week of December, while refining margins reduced to 11.52 USD/b over Dubai crude indicating a strong increase in demand from the Aviation sector. Indian Jet Kerosene prices on an average increased by 13% from the Q3 levels during Q4 of FY21 assessed on an Ex-Mumbai basis as demand revived by October as number of passengers travelling by air had increased by 70% according to DGCA on account of subsiding pandemic affect and loosened restrictions on both international and domestic travel. India’s Jet fuel consumption too reached a nineteen-month high in October. The demand is likely to increase in the new year although global airlines are keeping a close watch on the impact that the new wave of pandemic is likely to have on the aviation sector in the coming months.
Europe
European Jet fuel imports had risen to an annual high during the month of October but then slowly tapered off in the next two months owing to lowered demand. Over one million tons of Jet fuel stocks have arrived at Europe from Asia and the Middle East according to data from Refinitiv. Stocks in Antwerp-Rotterdam-Amsterdam reserves for December were assessed at 4% lower than the previous year levels in December. Over 650000 tons of Jet fuel is scheduled to arrive at Europe from Asia and the Middle East in the month of January. Refiners in Europe had been prioritizing diesel over Jet fuel over the last three months of FY21. The trend is, however, expected to change in the new year with refiner margins expected to rise to USD 20/MT vis-à-vis the brent crude prices and the margins are expected to go lower during the first half of FY22 before bottoming out in June. January also might witness diversion of Asian Jet fuel cargoes destined towards US to be diverted to Europe amidst surge in demand.
For the Quarter Ending September 2021
North America
In the North American region, U.S. refiners witnessed higher earnings during the third quarter owing to the improvement in margins to sell gasoline and diesel despite the surging cost and low inventories of crude oil. Energy demand recovered rapidly from the worst days of the pandemic in 2020, and Brent and U.S. crude oil prices reached multi-year highs in Q3 2021. As Jet fuel demand is still not up to pre-pandemic levels, market players eyed on resumption in international flights to Europe in November.
Asia
The Asian market of Jet Kerosene showcased mixed sentiments during the third quarter of 2021. An improvement in industrial activities was observed in Q3 which pushed up the global aviation sector including India. Despite the fact that the aviation sector of India gained momentum in the 3rd quarter after battling with the second wave of COVID devastation, prices of Jet kerosene fluctuated in a narrow range. In addition, domestic manufacturers halted their production under the fear of the third wave of COVID-19 and to improve the preserve margins. Jet Kerosene prices in India improved during the second half of August and eventually settled at USD 627 per MT in September.
Europe
The overall demand in the European region remained well supported in Q3 2021. Despite concerns over the spread of the COVID-19 Delta variant, key oil-based transportation fuels got closer to pre-pandemic levels due to the reopening of global economy. While the demand for jet fuel struggled back amid global travel curbs, gasoline and diesel sales showed a sharp rebound. Travel optimism with improved vaccination rate in Europe provided support to jet fuel/kerosene pricing in Q3.
For the Quarter Ending June 2021
North America
Rapid recovery from pandemic after successful vaccination drive increased Jet Kerosene consumption across North America during this quarter. Post this rise, an effective rebound in prices of Jet Kerosene was also observed in USA, where prices consistently traced upward trajectory, as the US government steadily lifted international travel ban. In addition, rising crude values also exacerbated this price hike, where USA faced difficulties due to sudden hike in demand amid rising upstream cost. Primarily, increase in consumption from domestic aviation sector increased the prices of Jet Kerosene from USD 545/MT to USD 607/MT during April-June timeframe.
Asia
Asian Jet Kerosene consumption varied country over country during this quarter. China witnessed a steep rise in domestic Jet Kerosene consumption during Q2 2021, backed by recovery in economic activities and relaxation of national and international travel ban. Meanwhile in India, a steep decline in consumption of Jet Fuel was observed during this timeframe, due to sudden implementation of COVID restrictions amid second wave of pandemic in the country. However, prices kept on rising, under international pressure. Therefore, the prices of Jet Kerosene rose from USD 967.6/MT to USD 1072.2/MT during this quarter in India.
Europe
Europe also witnessed a steep rebound in prices of Jet Kerosene during this quarter, backed by recovery in consumption by regional aviation sector. European governments relaxed travel bans from the people inoculated with COVID vaccine. These decisions were taken to kick start the domestic aviation sector, which faced devastation since last year due to pandemic. In addition, rising crude oil values also supported the overall price trajectory in this timeframe.
For the Quarter Ending March 2021
North America
Jet Kerosene demand were observed improving consistently compared to the prior quarter in North America, as international flights stated taking off with the economic rebound. Although the demand for Jet Kerosene from the aviation sector was observed to be low initially during January, but rapid vaccination roll out brought overall improvement in the demand. Varying with consistent demand from the aviation sector, the price of Jet Kerosene rose from USD 972.5/MT in January to USD 1197/MT in March, although lower output from the US gulf coast amidst winter disruption also contributed to this rise.
Asia
Jet Kerosene demand from Asian countries varied with the recovery of the aviation sector amid COVID 19 crisis. Aviation sector of China was expected to rise but was observed to be way below the pre-pandemic levels, prompting Jet Kerosene manufacturers to look towards export markets as the domestic demand remained unreasonably low. On the other side, demand for Jet Kerosene from the Indian aviation sector showed a healthy improvement which supported the prices of Jet Kerosene across the country. The price of Jet Kerosene in India rose by 9.9% within the quarter, backed by recovery in the crude values.
Europe
Another wave of COVID 19, fresh lockdown restrictions and slower pace of vaccination halted the improvement of the European aviation sector during Q1 2021. It was observed that the operations turned lower than the prior quarter due to fresh restrictions over several economies. Hence the demand for Jet Kerosene from the aviation sector remained low initially, pushing Jet Kerosene values to undue stability. Although demand is expected to show improvement as UK has announced to resume international travel from early May.
For the Quarter Ending September 2020
Asia
The Asian Jet Kerosene market values edged higher in Q3 of 2020 on pickup in demand for heating oil Kerosene ahead of the winter season. But with travelling season in major global economies coming to an end, the market ended up with lull demand by the end of September. While stock piling due to seasonal shortage temporarily eased off the downward pressure on weak margins of Jet Kerosene, a meaningful rebound is anticipated to take at least a year due to uncertainties over travel activities. To secure profit amidst tepid demand, manufacturers are anticipated to blend excess jet cargoes into alternate fuel pools till 2021.
North America
Market fundamentals of Jet Kerosene in North America observed unprecedented recovery in comparison to other regions because of the higher domestic travel activities. With the travelling season marking an end by September, the demand is likely to stagnate for several months on reduced commercial travelling. Refiners are expecting further boost in recovery by the last quarter with high hopes of increment in the international travel activities as coronavirus cases have plateaued in many economies after surpassing the peak.
Europe
The European Jet Kerosene market witnessed dented demand in Q3 as resurgence in coronavirus cases aggravated the global travel restrictions. Surplus cargoes amidst lull demand has continued to exacerbate the supply side crisis. With consumption pattern primarily related to growth in travelling pattern, the demand is likely to stay muted with extended restrictions in international travel activities on fears of second wave of coronavirus across the globe.
